Global Gold ETFs Record 1st Annual Inflow in 4 Years: A Milestone Achievement

As the equity market continues to experience volatility, gold has emerged as a safe-haven asset, leading to a surge in investments in gold Exchange Traded Funds (ETFs) in India. The World Gold Council (WGC) revealed that December 2024 marked the 8th consecutive month of inflows into gold ETFs, reflecting a shift in investor sentiment amidst persistent market uncertainties.

Gold Price Trends in India

On January 10, 2025, the price of 10 grams of 24-karat gold in India was ₹78,630 as of 12:55 PM, an increase of ₹170 per 10 grams.

Moderated Inflows: A Changing Pace

While gold ETF inflows persisted in December, the WGC noted a moderation in the pace compared to earlier months. Despite this, the trend signifies sustained investor interest in the metal, driven by domestic and international factors.

Factors Driving Gold Investments

1. Market Volatility:
   The turbulent equity market environment has propelled Indian investors towards gold, seeking stability in an unpredictable landscape.
2. Geopolitical Risks:
   Heightened global tensions further solidified gold’s position as a preferred asset during uncertain times.
3. Rate Cut Expectations:
   Anticipations of rate cuts by central banks worldwide have contributed to optimism in the bullion market, boosting gold’s appeal.

Global Gold ETF Trends: A Milestone Year

Globally, gold ETFs achieved a remarkable milestone in 2024, recording their 1st annual inflow in 4-year. Despite minor declines in holdings, total assets under management surged by 26%, reaching a record $271 billion. This growth was propelled by net inflows of $3.4 billion and robust gold price performance, marking the strongest annual price rise since 2010.

India’s Contribution to Global Gold Demand

India played a crucial role in the global gold market, purchasing 73 tonnes of gold in 2024. By the end of November, the country’s total gold reserves stood at 876 tonnes, making it the 2nd largest buyer of the year after Poland.

Central Bank Activity: Key Players in 2024

1. Poland:
   The National Bank of Poland emerged as the top gold buyer, with year-to-date purchases of 90 tonnes. Its reserves grew by 21 tonnes in November, representing nearly 18% of its total reserves.
2. Uzbekistan:
   The Central Bank of Uzbekistan resumed gold acquisitions in November, adding 9 tonnes after a hiatus since July.

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