October Gold ETF Inflows Slow to ₹3,300 Crore as AMCs Suspend FoFs

Gold ETF Demand Cools as FoF Subscriptions Pause

October’s slower inflows reflect both weaker appetite amid a sharp price correction and a temporary squeeze on one route into gold ETFs.

FoF suspensions narrowed one route into gold

Gold ETF inflows fell from a seven-month high of ₹4,450 crore in September to an estimated ₹3,300 crore in October. The estimates are derived from assets under management data, so they should be read as an indication of net investment rather than as a direct tally of every investor transaction.

The timing matters. Gold ETFs can receive money through exchange purchases, direct unit creation with asset managers for large investments exceeding ₹25 crore, and gold FoFs, which invest in the underlying ETFs. Most AMCs paused fresh FoF subscriptions in the second half of October after a Sebi direction prompted concerns about rising gold imports and pressure on the rupee. With one channel restricted, a decline in overall inflows may partly reflect reduced access through FoFs, as well as changing investor sentiment.

Price weakness may also have tempered demand

Gold and silver ETFs had drawn sharply higher investor interest in 2025 amid a strong rally in precious metals. The subsequent correction has tested that enthusiasm: gold prices fell almost 10% over the two months ending October 31 and were 25% below their all-time highs in rupee terms.

A falling price can have competing effects on flows. Some investors may wait for greater stability, while others may see lower levels as an opportunity to add exposure. October’s lower inflow estimate cannot distinguish between those responses, particularly when FoF subscriptions were also curtailed. It is therefore best viewed as a snapshot of demand under unusual market and distribution conditions, not a standalone measure of long-term interest in gold.

Rate expectations and the dollar remain a headwind

The broader market backdrop has also become less supportive. N S Ramaswamy, head of commodity at Ventura, said expectations of US Federal Reserve rate hikes and hotter inflation concerns have supported a tightening bias. In his assessment, higher US bond yields and a robust dollar increase the opportunity cost of holding gold, which does not generate interest.

That combination can weigh on precious metals, although it does not settle the longer-term case for holding them. Satish Dondapati, fund manager at Kotak Mahindra AMC, expects near-term pressure and possible volatility, while describing gold as a potential long-term hedge against uncertainty and a source of portfolio diversification. The contrast is important: near-term price direction and a portfolio’s strategic allocation are separate decisions.

Key Highlights

• Estimated October gold ETF net inflows were about ₹3,300 crore, compared with ₹4,450 crore in September.
• Most AMCs suspended fresh gold FoF subscriptions in the second half of October following a Sebi direction.
• Gold ETF investments can also come through exchange purchases and direct unit creation for large investments exceeding ₹25 crore.
• Gold prices fell almost 10% over the two months ending October 31 and were down 25% from their all-time highs in rupee terms.
• Analysts cited rate expectations, bond yields and dollar strength as near-term pressures, while retaining a role for gold in long-term diversification.

Investor Note: Gold ETF flows are being shaped by both price volatility and a pause in FoF subscriptions. Investors considering exposure may want to weigh their time horizon and diversification needs rather than infer a durable trend from one month’s inflows; staged purchases can help avoid committing the full amount at a single price, but do not remove the risk of further declines.