How is investing in Gold ETF better than jewellery?
What is the right way to invest in gold? Why should you not invest in gold jewellery? What is the benefit of investing in Gold ETF? What should be the share of gold in the portfolio?
Indian investors have taken a liking to Gold Exchange Traded Funds. These funds attracted Rs 657 crore in January, which almost a seven-fold jump as compared December 2023, according to Amfi data.
The inflow helped increase the assets under management (AUM) of gold funds to Rs 27,778 crore or 1.6% by the end of January, as compared to Rs 27,336 crore at the December-end, the data showed.
The net flows in Gold ETFs were sharply higher at Rs 657.4 crore in January from Rs 88.3 crore in the previous month. A new gold ETF was launched by the Tatas which raked in about Rs 6 crore.
Experts believe that the appeal of the precious metal as a safe haven and hedge against inflation will continue amid ongoing geo-political tensions and higher inflation in the US.
With ongoing global tensions and the inflation in US still higher than the desired number, the appeal of gold as safe haven and hedge against inflation is expected to continue.
Gold prices in US have risen to new highs after crossing $2,100 per ounce mark in December 2023, but has been gradually falling since then. since then has come down gradually. In rupee terms, gold has done fairly well over the last year but dwarfs in comparison to how equities have fared.
In 2023, Gold ETFs had an inflow of Rs 2,920 crore, almost 5 times higher the Rs 459 crore inflow seen in 2022.
The attractiveness of gold as a safe haven and a hedge against inflation enhanced significantly in 2023. Rising inflation, subsequent interest rate hikes, and geopolitical events boosted the demand as investors sought a secure investment option.