Gold ETFs log ₹103-crore inflow in May

The inflow helped in raising the assets under the management of such funds to ₹23,128 crores at the end of May. Prices came off their highs on the back of positive news with regard to the U.S. government raising the debt ceiling

Gold Exchange-Traded Funds (ETFs), considered a safe haven during uncertain times, continue to glitter as they received a net inflow of ₹103 crores in May. The development comes after a net inflow of ₹124 crore was witnessed in the asset class in April. Before that, investors withdrew ₹266 crore from Gold ETFs in March, data from the Association of Mutual Funds in India (AMFI) showed.

The slightly low inflow in May compared to the preceding month could be attributed to profit booking.

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Gold price came off its highs towards the second half of May on the back of positive news with regards to the U.S. government raising the debt ceiling, thereby providing some buying opportunity, particularly after a sharp rally it witnessed since March this year, Melvyn Santarita, Analyst-Manager Research, Morningstar India, said.

“With gold prices still trading at high levels, some investors would have chosen to book profits or take on risk on approach with a view that central banks would pause further rate hikes,” said Mr. Satarita.

“This view seems to be materialising. That said, pertinent risks still engulf developed economies, and therefore, over the course of the month, investors flocked to gold ETFs, which is considered as a safe haven during uncertain times,” Mr. Santarita added.

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