Why are Gold ETF inflows rising?

• Geopolitical tensions have led to rising crude oil prices impacting the Indian stock markets.  

• Gold ETF inflows are rising because investors want to protect their portfolio against stock market crashes. 

• AMCs have temporarily restricted fresh investments in Gold ETF FoFs.

• Ongoing Gold ETF FoF SIPs continue uninterrupted and redemptions stay open.

• Mutual Fund Houses have not restricted investments in Gold ETFs. 

Did you know Gold ETF inflows surged 71% in September 2026 to ₹4,451 crores?

Why are so many investors chasing gold ETFs? Is it because gold prices dipped in September 2026 by 3.5% or is there another reason for this sudden interest in gold ETFs?

Lets go behind the scenes

Gold Exchange Traded Funds or Gold ETFs are funds that passively track domestic physical gold prices.  Each Gold ETF unit represents a fractional amount of gold and units can be bought and sold on stock exchanges. 
 

When you and other people invest in Gold ETFs the fund manager pools this money and buys physical gold of very high purity. This gold is stored in highly secure vaults managed by SEBI-registered vault managers.

Your investment in Gold ETFs are backed by actual physical gold stored in these vaults. So, if you buy 1 unit of Gold ETF you are the owner of a fractional piece of the physical gold stored in the vaults. 
 

Each unit represents a specified quantity of gold, which varies across fund houses. For some ETFs, one unit may represent 0.01 gram of gold; for others, it may represent a different quantity. You can check the scheme's documents to know exactly how much gold each unit represents.
 

And because Gold ETFs are listed on stock exchanges, you can buy or sell their units through a demat and trading account, much like shares. 

Many Asset Management Companies (AMCs) stopped accepting fresh subscriptions into their gold ETF Fund of Funds (FoFs) from October 16, 2026. Now, Gold ETF FoFs are mutual fund schemes that invest their assets in Gold ETFs. Several AMCs have also temporarily stopped fresh lump sum, fresh SIP (Systematic Investment Plans), fresh STP (Systematic Transfer Plans), SIP Top-up and switch-in for their Gold ETF Fund of Funds from October 16, 2026.

However, your existing SIPs and STPs in Gold ETF FoFs will continue and your applications will be processed at applicable net asset values (NAVs). AMCs will allow redemptions, switch-outs and SWPs (Systematic Withdrawal Plans) in their Gold ETF FoFs.

While the AMCs have not yet given any reason for restricting fresh investments in Gold ETF FoFs, it's most due to the fall in Indian rupee. It has corrected almost 7% against the US Dollar year-to-date in 2026. Also, this could be a precaution to avoid a surge in gold imports in October during the upcoming festive season and prevent the rupee from falling further against the US Dollar. 

No blanket restriction on exchange trading in Gold ETFs has been announced as such. You can still buy and sell listed Gold ETF units through your trading platform.
 

However, check a Gold ETF's indicative net asset value (iNAV) before buying.
 

Gold ETFs have two relevant prices:

• Market price: The price at which units trade on the exchange, determined by demand and supply.
• Net asset value (NAV): The per-unit value of the scheme's assets minus its liabilities, calculated using the applicable valuation method.
   

NAV is generally calculated at the end of the trading day. The iNAV provides an estimate of the fund's per-unit value during market hours.

If a Gold ETF trades above its iNAV, it is trading at a premium. If it trades below its iNAV, it is trading at a discount. A large premium means you could pay more than the fund's estimated underlying value.
 

You can compare iNAVs through exchange or AMC websites. Also compare expense ratios and tracking errors before choosing a Gold ETF.

While gold ETFs can help you diversify your portfolio, they shouldn't be bought simply because prices have risen or markets look uncertain.
 

Decide how much gold your portfolio needs, then invest in line with your financial goals and risk tolerance. A 10–15% allocation is sometimes used as a broad portfolio guideline, but the appropriate allocation depends on your circumstances.
 

Remember, gold can reduce some portfolio risks, but it cannot eliminate them.

What is the expense ratio in Gold ETFs?

Expense ratios are the annual fees charged by the fund for managing your investment in Gold ETFs and are deducted from the fund's assets. The Gold ETF expense ratio ranges from 0.3%-0.8% per year depending on the AMC.

What is tracking error in Gold ETFs?
Tracking error shows you by how much a Gold ETFs actual performance deviates from the price movements of physical gold in India. You can check Gold ETFs tracking error on the AMFI website.