Investments into physically-backed gold exchange-traded funds (ETFs) by Indians were the third highest in October, even as investors in the UK and Germany chose to exit, data from the World Gold Council showed.

Indian ETF investments were the fifth-highest between January 1 and October 31, with a third of the inflows coming in during October. Data showed that ETF investments in India were $2.91 billion as of November 7. In October, the inflows were $849.8 million.

Available data as of November 7 showed that investors began to exit in the first week, with the outflows in the US being $77.6 million and in other countries $38.3 million. Details of Indian investments are not available for the first week of November.

The global trend in gold ETF investments reflects the movement in the prices of the yellow metal, which has nearly 60 per cent so far this year. Prices of the precious metal rose to a record high of $4,381.58 an ounce on October 17.

Since then, gold has pared gains, and during the weekend, it was quoted at $4,083.60. In India, gold prices soared to ₹1,30,874 per 10 gm on October 17 before slipping to ₹1,24,794 lakh currently.

In October, the US witnessed the highest inflows into gold ETFs at $6.33 billion, while Chinese investments were $4.51 billion, followed by India. Japan also saw investments nearly topping $500 million in October.

Investors in the UK cashed in on the gold rally, with the outflows totalling $3.5 billion. In Germany, the redemption was $1.17 billion. Investors in South Africa, Italy and Turkey also redeemed their investments.

Investments into gold ETFs in the US were over three times that of the second-highest investor, China, year-to-date as of November 7. Inflows were $42.54 billion in the US compared with $12.95 billion in China. With investments to the tune of $3.94 billion, Switzerland’s inflows were the third, followed by the UK with inflows at $3.02 billion and India.

Geopolitical fears
According to the WGC, physically-backed gold exchange-traded funds are an important source of gold demand, with institutional and individual investors using them as part of well-diversified investment strategies.

Investments in gold in various forms have increased over the past two years on rising geopolitical crisis and uncertainty over trade wars, particularly between the US and other nations such as China, Brazil and Canada.

In 2025, gold ETF investments have witnessed the strongest inflow since 2020. Investment demand for gold bars, coins and ETF investments was 537 tonnes in the July-September quarter, with ETFs accounting for 222 tonnes. Total demand till now is 676.6 tonnes.

Key contributor
Overall gold holdings by ETFs were 3,895 tonnes as of November 7, just short of the 3,929 tonnes peak witnessed in November 2020.

The WGC said demand for gold ETFs has been a key contributor to the precious metal’s price performance so far in 2025, as inflows accelerated across all regions since September. The investments generated a “virtuous circle”, as inflows continued to rise with the spike in the price of gold.

In India, too, investments into gold ETFs increased in September due to the price rally and the festive season. Demand for gold ETFs was “consistently strong throughout the September quarter”, the WGC said.

Courtesy : The Hindu Business Line