Gold ETF inflows drop 57% MoM to Rs 2,265 crore; silver ETFs see second straight month of outflows

Fri Apr 10 2026

Gold ETF declined by 57% on a month-on-month basis to Rs 2,265 crore in March compared to an inflow of Rs 5,254 crore in February, according to data released by the Association of Mutual Funds in India (AMFI). The data further showed that silver ETFs saw outflow for the second straight month in March.

According to AMFI data, silver ETFs saw an outflow of Rs 683 crore in March against an outflow of Rs 826 crore in February.

Performance check

Commodity-based ETFs fell sharply in March, with several slipping up to 15% as silver-led declines dragged the segment lower. Of the 43 commodity-focused ETFs, all delivered negative returns during the month. UTI Silver ETF recorded the steepest fall, dropping about 14.72%.

Four silver ETFs - DSP Silver ETF, Aditya Birla SL Silver ETF, Zerodha Silver ETF, and HDFC Silver ETF - delivered negative returns of 13.96%, 13.85%, 13.81%, and 13.81%, respectively. The other 13 silver ETFs delivered negative returns ranging between 11% to 13.80% in the month of March.

There were 25 gold ETFs which delivered negative returns ranging between 7.17% to 9.54% during the period under review.

Nehal Meshram, Senior Analyst, Morningstar Investment Research India, said Gold ETFs continued to register net inflows in March 2026, though at a slower pace than in the previous two months. While the pace of inflows has moderated sequentially, investor interest in gold-backed products remained positive.

Meshram further said that the slower inflows in March likely reflect a combination of normalisation after a very strong start to the year and some moderation in fresh allocations

What happened in March

In mid-March, Fed Chair Jerome Powell signalled that the oil shock was an “energy-driven inflation tax” requiring interest rates to stay higher for longer. Signs of tightening dollar funding appeared, reinforcing the view that cash dollars were in high demand, which removed the liquidity tailwinds that had buoyed gold and instead created headwinds of a strengthened dollar and a resolutely hawkish policy outlook, according to a report by Axis Mutual Fund.

The result was a crash in precious metals by mid-March: gold dropped over 10% in a week (its steepest weekly fall since 1983), and silver plunged more than 15%. At the same time, a previously supportive trend began to reverse; after two years of accumulation, central banks slowed their gold purchases in early 2026, and gold-backed ETFs saw net outflows for several consecutive weeks.

The net assets under management of gold ETFs and silver ETFs declined by 6% and 13%, respectively. The total AUM of gold ETFs was recorded at Rs 1.71 lakh crore, whereas that of silver ETFs was recorded at Rs 79,805 crore.

A report by Tata Mutual Fund said that gold prices have witnessed selling in March 2026, falling by approx. 7% in India, while in dollar terms, prices fell by 11% during the same period. Gold prices declined on a stronger dollar and margin call requirement with sell off in riskier assets over heightened tensions in West Asia. The sharp rupee depreciation has kept the downside limited in domestic gold prices compared to the fall in international prices.

On the other hand, silver prices declined alongside industrial metals amid mounting demand concerns. The weakened global economic outlook may cap silver demand in the medium term, it added. A slowdown in solar installations and significant liquidation of long positions have also eased supply tightness in the global market.

What should investors do?

The report by Tata Mutual Fund said gold prices are expected to consolidate within the current range in the short term, driven by mixed market fundamentals, a prolonged pause in US interest rates, a stronger dollar and higher yields. Price swings of around 5% are likely, while the medium-to-long-term outlook remains bullish on supportive structural and cyclical factors.

“Investors may look for accumulation on any decline in prices. We still believe that the overall market environment is going to be favourable for a strategic allocation in gold as a long-term investment in the portfolio.”

For investment in silver, Tata Mutual Fund suggested one could look for a staggered approach to invest in the medium term to long term investment, considering the volatile nature of the commodity.

Source: https://economictimes.indiatimes.com