Volatility in the stock market has boosted investment in gold Exchange Traded Funds (ETFs) in India as the country witnessed ETF inflows for the eighth consecutive month in December 2024, the World Gold Council (WGC) said in its commentary.
The trends for gold ETFs reflect increasing investor interest in the metal as stock market volatility continued. The gold price for 10 grams of 24 karat gold (99.9 percent) in Delhi, India today is ₹79,830.00.
The WGC further emphasized that the pace of inflows has moderated compared to previous months.
The increase in gold investments can be attributed to a combination of domestic and international factors. A volatile stock market environment, coupled with heightened global geopolitical risks, sent Indian investors to gold as a safe haven, the report said. Moreover, expectations of further interest rate cuts by central banks worldwide fueled optimism in the precious metals market.
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Also read: Gold ETFs are winning the hearts of Indian investors
Globally, gold ETFs hit a milestone in 2024: their first annual inflows in four years. Despite small declines in collective holdings, total assets under management (AUM) rose 26 percent to a record $271 billion, driven by a soaring gold price and net inflows of $3.4 billion.
This was the strongest annual gold price performance since 2010.
Asian markets, including India, played a crucial role in driving global gold ETF inflows. Earlier this week, the WGC said that India has purchased 73 tonnes of gold so far with a total gold reserve of 876 tonnes at the end of November, making the country the second largest buyer of 2024 after Poland.
The National Bank of Poland (NBP) emerged as the largest buyer of gold in November, increasing its reserves by 21 tonnes to a total of 448 tonnes.
Gold accounts for almost 18 percent of Poland’s total reserves, just below the 20 percent target.
With an annual purchase of 90 tons, NBP has maintained its position as the largest gold buyer of 2024.
The Central Bank of Uzbekistan also made significant additions, increasing its reserves by 9 tons after a hiatus since July.
