The rising popularity of zero brokerage apps in India has made it easier for investors to explore gold Exchange Traded Funds (ETFs). The World Gold Council (WGC) has highlighted that India experienced its eighth consecutive month of inflows into gold ETFs in December 2024, showing the growing preference for gold investments.
The steady interest in gold ETFs comes as stock market volatility continues to shake investor confidence. Gold’s appeal as a stable and safe asset has gained traction, especially as the equity markets face unpredictable shifts.
In Delhi, the price of 24k gold (99.9 per cent purity) is currently ₹79,830 for 10 grams.
Why Are Indians Turning to Gold ETFs?
Tradex.live noted that while the pace of inflows into gold ETFs has slowed compared to earlier months, the trend remains strong. Several factors are driving this interest:
- Stock Market Uncertainty
A fluctuating equity market has made gold an attractive option for investors seeking stability. - Global Geopolitical Risks
Ongoing international tensions have further encouraged Indian investors to view gold as a safe haven. - Optimism About Rate Cuts
Expectations of central banks worldwide lowering interest rates have boosted confidence in the gold market.
These factors, combined, have led to a notable increase in investments in gold ETFs across India.
A Global Trend
On a global scale, 2024 was a remarkable year for gold ETFs. For the first time in four years, global gold ETFs saw annual inflows, driven by rising gold prices and net investments of USD 3.4 billion. The total assets under management (AUM) for gold ETFs reached a record USD 271 billion, a 26 per cent increase.
This surge also marked the best annual gold price performance since 2010.
Asia’s Role in Global Gold Demand
Asian markets, especially India, played a key role in the global growth of gold ETF investments. India purchased 73 tonnes of gold in 2024, bringing its total gold reserves to 876 tonnes as of November. This made India the second-largest buyer of gold that year, trailing only Poland.
Top Gold Buyers of 2024
- Poland: The National Bank of Poland (NBP) led global gold purchases, adding 21 tonnes in November and increasing its total reserves to 448 tonnes. Gold now makes up 18 per cent of Poland’s total reserves, nearing its goal of 20 per cent.
- Uzbekistan: After a pause since July, Uzbekistan’s central bank resumed gold purchases, adding 9 tonnes to its reserves.
The increasing focus on gold across nations underlines its role as a reliable asset in uncertain times.
Conclusion
The Indian market has shown a growing preference for gold ETFs, boosted by both domestic challenges like stock market volatility and global factors like geopolitical risks and central bank policies. With tools like zero brokerage trading apps in India simplifying investments, gold ETFs are becoming an increasingly accessible and attractive option for investors.
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