India’s Gold ETF inflows climb 71% in September despite price decline

what happened

Mint reported that Gold ETFs in India received net subscriptions of Rs.4,451 crore in September 2026, the strongest monthly result so far in FY2026-27. The figure was 71% above August’s Rs.2,597 crore, based on Association of Mutual Funds in India (AMFI) data. The surge came while gold prices fell 3.5% during the month, indicating that some investors may have treated the decline as an opportunity to add exposure.

Adil Chacko, executive director at Anand Rathi Wealth, attributed the demand to geopolitical uncertainty, inflation concerns and gold’s use as a hedge. He said tensions in West Asia and elevated crude oil prices supported interest in the metal, while India VIX rose by more than 25% from its September lows. Chacko also said the flows may reflect expectations of additional gains. In January 2026, Gold ETFs recorded approximately Rs.24,040 crore of inflows, the highest monthly figure in the cited data, when gold had already approached Rs.1.75 lakh per 10 grams. He described investors’ expectation that the recent performance will persist as recency bias.

The appetite for gold did not mean investors stopped buying equities. AMFI reported net inflows of Rs.38,307 crore into equity mutual funds in September. Chacko said gold can support diversification during uncertain periods, but warned against overreacting to its recent performance. In the five-year performance periods since 1990 that he cited, the Nifty 50 produced stronger risk-adjusted returns than gold, supporting the view that equities should remain the core of a long-term wealth-building portfolio.

why it matters

The figures point to parallel demand for defensive exposure and equities rather than a wholesale shift away from stocks. For markets, the September flows highlight how geopolitical risk, inflation concerns, recent returns and portfolio diversification can influence allocations at the same time.

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