Gold rates at all-time high above ₹96k/10 gm, yet investors withdrew ₹77 crore from ETFs in March. What's the reason?

Gold has been the talk of the town for more than a year now. Gold rates have jumped as much as 21.4% since the beginning of 2025, increasing from ₹79,390 per 10 gm (24K, 99.9% purity) on January 1 to hit their lifetime high of ₹96,450 per 10 gm (24K, 99.9% purity) in Delhi on Friday, April 11.

While experts had been anticipating that gold would surpass the ₹95,000/10 gm mark for a while now, it is the trade war fears, led by US President Trump's 145% tariffs on imports of Chinese goods, that tipped the scales in the favour of the yellow metal, pushing gold to its all-time high.

Gold prices in international markets have skyrocketed as well. Spot gold prices touched their all-time high of $3,237.39 per ounce on Thursday, later settling at $3,222.04 per ounce. The yellow metal has been on a bull run in both overseas and domestic markets.

Meanwhile, gold ETFs have seen a decline in the month of March, despite delivering record-high prices. Investors withdrew (net outflow) as much as ₹77 crore from gold ETFs in March 2025 after recording a net inflow of ₹1,979.84 crore in February and ₹3,751.42 crore in January, as per AMFI data.

Let’s have a look at the performance of gold ETFs in the last one year:

• Although gold ETFs have seen a net outflow of ₹77 crore in March, the net assets under management (AUM) reached a peak of ₹58,887.99 crore, highlighting persistent investor interest in the segment.

• In the last six months, from October 2024 to March 2025, the net AUM in gold ETFs grew by nearly 32%, indicating steady growth.

• March 2025 saw the first negative net flow after nearly a year of consistent inflows, hinting at possible profit booking among the investors. Net outflows (₹395.69 crore) were last recorded in April 2024.

Outflows in Gold ETFs

Gold ETFs are investment tools that track the domestic price of physical gold. They are traded like shares on stock exchanges in India. These ETFs are backed by physical gold and regulated by the Securities and Exchange Board of India (SEBI), making them a safe option for investing in gold with no storage or authenticity concerns.

As per experts, the recent rally in gold prices may have resulted in profit booking, signalling a short-term approach to gold investing. The outflows are seen amid soaring gold prices, which indicates a shift in investor priorities, as per commodity experts.

Furthermore, gold is more than a metal for Indians. From being a crucial part of religious ceremonies like weddings to being a traditional symbol of prosperity, the yellow metal is precious in ways more elaborate than just its safe-haven appeal. A shift to physical gold ahead of festive or wedding season demand might have also contributed to investors moving funds from gold ETFs.