Gold’s 50% YTD Rally Fuels ETF Demand: Should You Invest Now Or Wait For A Dip?

News18

Gold ETFs Net Inflow: Gold ETFs have remained a strong preference among investors amid the macroeconomic uncertainty and yellow metal’s phenomenal rally over 50% year-to-date in 2025. It tends to reflect a clear shift in how households prefer to hold the yellow metal as well. According to AMFI data, Gold ETFs recorded Rs 7,743 crore in October 2025, a slight dip from the net inflows of Rs 8,363 crore in September, though the segment remains among the best performers in the passive category.

Analysts say domestic investors are viewing gold as a hedge against inflation, currency swings and geopolitical tensions. They are also becoming more comfortable with digital formats.

Morningstar’s Nehal Meshram said the steady inflows show a “continued preference for gold as a safe-haven and a portfolio diversifier,” even though global prices stayed range-bound through October. She added that investors are tactically using gold to “preserve wealth and diversify exposure,” especially at a time when global bond yields remain high and equity markets are volatile.

Industry experts note that the shift toward ETFs is also shaped by generational behaviour. Younger investors prefer digital gold and ETFs because they offer instant execution, liquidity, zero storage costs and the flexibility to buy small amounts. Traditional buyers still favour physical gold for weddings and ornamentation, though even they are gradually adopting digital routes for savings.

What Should Investors Do Now? Enter or Wait?

Views are mixed. Some analysts see scope for staggered entry, while others prefer caution.

At the global level, gold and silver prices are being supported by heavy central bank buying. Justin Khoo, Senior Market Analyst – APAC, VT Markets, said gold around $4,200/oz and silver near $54/oz reflect a “powerful confluence of factors,” led by massive central bank accumulation, de-dollarisation trends, and persistent geopolitical tensions. He noted that buyers should expect short-term volatility but a strong long-term floor due to sustained official-sector demand. His advice: use dips or adopt a dollar-cost-averaging approach to manage price swings.

Swapnil Aggarwal, Director, VSRK Capital, believes investors should be careful at current levels because gold and silver are in a highly volatile zone. He said factors such as shifting US tariff policies and global macro uncertainty could trigger price corrections. Aggarwal advises investors to wait, watch global cues, and avoid lump-sum buying, especially if they are new to precious metals.

Overall, experts say the strategy should depend on investor behaviour—cautious buyers can wait for dips, while long-term ETF investors can spread purchases over time.