Summary of this article
Gold ETFs recorded Rs 3,443 crore inflows in June.
Overall mutual fund industry saw huge net outflows recently.
Investors bought the dip after gold prices corrected downwards.
June 2026 remained full of uncertainty and volatility for investors despite a brief halt in the West-Asia conflict. As investors navigated the dynamics of the changing geopolitical situation, their investment decisions led to shifts in trends for the mutual fund industry.
According to data for the month of June released by the Association of Mutual Funds in India (Amfi) the overall net outflows for the month stood at Rs 52,948.78 crore. In the previous month, the mutual fund industry saw a net outflow of Rs 64,021.17 crore, showing a decline in the net outflows. Amid this consolidation, gold exchange traded-funds (ETFs) managed to make a strong recovery after witnessing outflows in the previous month.
Gold ETFs Witness A Turnaround In Inflows
Inflows into gold ETFs rebounded in the month of June compared to May 2026. Even as the mutual fund industry saw negative inflows, gold ETFs recorded a net inflow of Rs 3,443.23 crore during June after witnessing a net outflow of Rs 725.04 crore in May.
The rebound hints that investors are rebalancing their portfolios amid the changing dynamics of the securities market. Notably, the rebound in inflows also points towards a shift in investor sentiment regarding precious metals.
The investor base for gold ETFs also expanded, as the total number of folios increased to 12.47 million at the end of June, up from 12.34 million at the close of May. Funds mobilised through gold ETFs grew to Rs 4,907.58 crore in June from Rs 2,604.73 crore in May. The pressure from redemptions also eased in June as gold ETF investors made redemptions worth Rs 1,464.35 crore in June, down from the Rs 3,329.77 crore in May 2026.
What Caused The Rebound In Inflows In Gold ETFs
Multiple factors are likely to have caused the rebound in gold ETFs inflows after the sell-off seen in May. One of the key reasons behind the rebound is that in May, domestic gold prices remained in the green zone trading between Rs 1,63,212 per 10 grams and Rs 1,49,351 per 10 grams. As prices reached close to their all-time high, investors booked profits and liquidated holdings leading to negative net inflows in May.
However, a subsequent correction in gold prices during the month of June amid news of a peace deal, led to gold losing its safe haven appeal and a fall in prices. As prices fell, it is likely that investors used the opportunity to buy the dip, viewing the declining prices as an opportunity to accumulate gold.
Later in the month, persistent global economic uncertainties and volatile domestic equity markets also led to investors investing in safe-haven gold-based assets to hedge their bets. Notably, gold has served as a safe haven asset, and retail investors tend to turn back to it to protect their capital.
Even as investors attempt to hedge their bets by investing in safe-haven assets, financial experts recommend adding safe-haven assets in a balanced and staggered manner. Experts generally recommend that gold and silver based assets should not make up more than 10-15 per cent of an investors’ total portfolio.
