Summary of this article
India’s Gold ETFs attracted a record $2.48 billion of net inflows in January 2026
January inflows were nearly double the $1.25 billion recorded in December 2025
January inflows alone accounts for 12.50 per cent of India's total Gold ETFs' AUM
Experts advise gradually building exposure rather than rushing in aggressively
India’s Gold exchange-traded funds (ETFs) attracted a record $2.48 billion (Rs 22,500 crore) of net inflows in January 2026, marking the eighth consecutive month of positive flows, according to data from the World Gold Council (WGC). The month’s inflows were nearly double the $1.25 billion recorded in December 2025, reflecting a 98.61 per cent month-on-month (m-o-m) jump. This represents the highest monthly inflow on record for domestic Gold ETFs. Notably, the January inflows alone accounts for 12.50 per cent of the country's total Gold ETFs' assets under management (AUM).
The sudden surge in Gold ETF inflows comes amid a combination factors such as volatile equity markets, heightened global macro risks, persistent policy uncertainty and a preference for regulated, transparent avenues to gain exposure to the safe haven metal.
“The strong inflows into Gold ETFs reflect a broader shift in investor behaviour rather than a short-term tactical move. After strong equity market rallies and rising valuations in certain segments, investors have been increasingly focused on portfolio diversification and risk management. Gold has benefited from this rebalancing. Gold ETFs, in particular, have gained traction due to their ease of access, transparency, and liquidity compared to physical gold. Expectations around future interest rate cuts and ongoing global uncertainties have further strengthened gold’s appeal as a strategic allocation. The scale of inflows suggests that investors are looking at gold as a long-term portfolio component rather than a temporary hedge,” said Nikunj Saraf, CEO of Choice Wealth.
The ETF route has also benefited from its liquidity, ease of access, and lower holding costs as against physical Gold.
The abrupt rise in inflows came amid a strong rally in Gold prices, with domestic derivatives prices climbing over 38.50 per cent in the month of January 2026.
The April Gold futures on the Multi Commodity Exchange (MCX) touched an all-time high of Rs 1,93,096 per 10 grams on January 29. However, a day later it crashed over 17 per cent after the US President Donald Trump officially nominated Kevin Warsh as the next Chair of the US Federal Reserve on January 30. Warsh, a former Federal Reserve Governor, has been chosen to succeed Jerome Powell, whose term is set to expire in May 2026. The appointment is subject to confirmation by the US Senate.
Over the next two days, the futures contract trickled down to hit a low of Rs 1,37,065 per 10 grams, and as of February 9, it traded at Rs 1.56,726 per 10 grams.
Should You Buy the Dip or Stay Cautious?
The recent reversal in Gold prices has put investors at a familiar crossroads—whether to use the correction as a buying opportunity or stay cautious amid near-term volatility. Market experts largely see the correction as a pause after a strong rally rather than a reversal of trend, though they advise a measured approach.
Nikunj Saraf, CEO of Choice Wealth, believes the correction is part of a healthy consolidation. “The recent correction in Gold prices appears more like a phase of consolidation after a strong rally rather than a change in the broader trend,” he said. Saraf added that “some cooling-off at these levels is normal,” and for investors with a medium-to-long-term view, the current phase “offers an opportunity to gradually build exposure rather than rushing in aggressively.” He cautioned against trying to perfectly time the market, advised that “staggered investments work better,” and reiterated that Gold should be seen as “a portfolio hedge and a stabilising asset, not a short-term return-seeking trade,” especially when volatility is still elevated.
Echoing a similar view, Prathamesh Mallya, deputy vice president of research, non-agri commodities at Angel One, said Gold ETFs are becoming increasingly compelling for long-term investors. “Gold ETFs have become relatively more attractive from a long-term perspective,” Mallya said, adding that historically, such dips have often allowed investors to “gradually increase exposure,” given Gold’s role as a hedge against volatility, inflation and geopolitical risks. However, he also flagged that short-term price swings could persist, suggesting that instead of timing the market, investors may consider a “staggered or systematic approach through Gold ETFs.”
Key Triggers To Watch For Gold’s Near-Term Direction
To track the yellow metal’s near-term price trajectory, analysts say investors should closely monitor US interest rates and bond yields, movements in the US dollar, geopolitical developments, global risk sentiment, and domestic cues such as rupee movements and local demand trends.
According to Mallya, near-term price action in Gold will be dictated largely by global macro variables. “In the near term, Gold prices are largely influenced by a mix of global macro and market-specific triggers,” he said. Further, according to him, “movements in US interest rates and bond yields” are critical to watch, as higher rates generally exert pressure on non-yielding assets like Gold. He added that “the trajectory of the US dollar is another important indicator,” saying that a stronger greenback often limits Gold’s upside. Mallya also said that “any escalation in geopolitical tensions or financial market volatility can revive safe-haven demand for Gold.” On the domestic side, he said investors should track “rupee movements and local demand trends,” as these factors directly influence Gold ETF prices in India.
Saraf also highlighted similar triggers. “Gold’s near-term movement will largely be driven by global macro developments,” he said, adding that “central bank policy signals, especially from the US Federal Reserve, remain important.” Expectations of lower interest rates, he noted, tend to be supportive for Gold prices. Saraf also highlighted the impact of currency and yield movements, stating that “movements in the US dollar and bond yields also influence Gold,” with a softer dollar environment generally favouring the metal. Beyond macro data, he said geopolitical developments continue to shape safe-haven demand, while “continued Gold buying by global central banks” has been providing steady underlying support and limiting strong downside risks.
($1 = Rs 90.66)
