Gold exchange-traded funds recorded highest inflows in six years in August aided by record-high gold prices amid uncertainty in equity markets on the back of a global economic slowdown and concerns of trade wars. Net inflows in gold ETFs jumped to Rs 145 crore in August, compared to an outflow of Rs 17.66 crore in July and an outflow of Rs 45 crore in August 2018, according to data released by the Association of Mutual Funds in India (Amfi) on Monday.

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This was the first inflow since November last year, when Rs 10 crore was infused in such instruments. Prior to this, gold ETFs had seen a net inflow of Rs 20 crore in October 2016 and before that, an inflow of Rs 5 crore was witnessed in such funds in May 2013.

Net inflows of Rs 145 crore in gold ETFs in August rose were the highest since December 2012, noted Bloomberg. According to Amfi data, average net assets managed by 12 gold ETF managers rose to Rs 5,451.72 crore in August, compared to Rs 4,909.28 crore in July and Rs 4,445 crore in August 2018. Globally, holdings in gold ETFs remained near the highest level since 2013, reported Bloomberg.

Higher gold prices are likely to have encouraged investors to consider putting their money in the gold ETFs, Amfi head NS Venkatesh told reporters.

Investors pulled out Rs 571 crore from gold ETFs in 2018, making it the sixth consecutive year of outflow from such products. In comparison, they pulled out Rs 730 crore in 2017. Such instruments had seen an outflow of Rs 942 crore, Rs 891 crore, Rs 1,651 crore and Rs 1,815 crore in 2016, 2015, 2014 and 2013, respectively. In 2012, gold ETFs saw an inflow of Rs 1,826 crore.

Gold prices in India hit a record high of over Rs 40,000 in New Delhi at the end of August. On Monday, gold futures in India, the biggest bullion consumer after China, were trading around Rs 38,520 per 10 grams, easing from a record high Rs 39,885 touched on September 4. Spot gold prices declined by Rs 300 to Rs 39,225 per 10 gram in absence of demand and a stronger rupee.

Analysts believe that uncertainties around US-China trade ties, fears of a deceleration in global economic growth and negative Treasury yields around the world were further supporting bullion.

First Published:Sept 10, 2019 9:57 AM IST