Net inflows in Indian gold ETFs drop to six-month low in May
Premium- Net outflows in Indian gold ETFs are in contrast with the global trend. Globally, gold ETFs saw an inflow of $3.4 billion in May after three months of outflows
Net inflows in Indian gold exchange traded funds (ETFs) dropped to a six-month low of ₹287.86 crore in May, as per the data released by Association of Mutual Funds of India (AMFI) today.
It is around 60% lower than the net inflow seen in April. The decline was seen despite the fact that gold prices have recovered from a two-month low.
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Gold prices surged around 7% in May on safe-haven appeal amid concerns over inflation, easing bond yields and weaker dollar. Going forward, expectations of higher inflation and central banks' tapering will drive prices of the yellow metal higher.
Net outflows in Indian gold ETFs are in contrast with the global trend. Globally, gold ETFs saw an inflow of $3.4 billion (61.3 tonnes) in May after three months of outflows. Assets under management (AUM) of gold ETFs stood at 3,628 tonne.
Besides inflationary concerns, the recovery in gold prices was supported by a sharp correction in cryptocurrencies in May.
Experts feel that gold will continue to attract investments for hedging risk against other asset classes.
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