India's Gold ETFs Boom Amidst Market Volatility

India's gold exchange-traded funds (ETFs) saw a surge in inflows in September, marking a record $10 billion in assets under management. With $902 million in inflows last month alone, Indian investors are increasingly turning to gold ETFs amid a weaker local currency and volatile stock market conditions.

India's physically backed gold exchange-traded funds (ETFs) experienced an unprecedented spike in inflows during September, reaching a record $10 billion in assets under management. Investors sought refuge in the precious metal due to lackluster stock market returns and a weakening local currency. The surge reflects a strategic shift among urban investors.

The increased demand for ETFs is expected to elevate gold imports in India, the world's second-largest gold consumer, potentially widening the nation's trade deficit and straining the rupee. This comes as global gold prices hit record highs, further attracting attention from the investment community.

Data from the World Gold Council revealed that September's inflows amounted to $902 million, pushing total holdings to a record 77.3 tons. With inflows surpassing $2.18 billion this year, experts believe the trend will continue, driven by gold's perceived safety amid geopolitical and economic uncertainties.

(With inputs from agencies.)