Inflows into Gold-linked ETFs Hit Highest Level in Seven Years

SEATTLE (Scrap Monster): The latest trade data published by the Association of Mutual Funds in India (AMFI), gold-linked Exchange Traded Funds (ETFs) saw inflows of nearly INR 202 crore in the month of January this year.

The inflows during the month were significantly higher when compared with the prior month. AMFI data indicates that gold-linked ETFs had recorded an inflow of only INR 27 crore in December 2019. The ETFs had recorded inflow of INR 7.68 crore in November last year. However, AMFI data points to outflow of INR 31.45 crore during the month of October 2019.

ALSO READ: Net Gold Purchases by Central Banks Surged for Tenth Straight Year

According to investment advisors, there has been an increased investment demand for safe-haven assets over the past one year, especially on account of geopolitical tensions in different parts of the world and visible slowdown in global economy. The recent outbreak of coronavirus in China has further enhanced the appeal of the yellow metal, they noted.

As of end-January 2020, the asset under management (AUM) of gold funds surged higher significantly by nearly 8% from the prior month to INR 6,207 crore, AMFI data suggested.

This is the highest monthly inflow since December 2012, when inflows had spiralled to INR 474 crore. Also, January 2020 witnessed third straight month of inflows.