Gold exchange-traded funds (ETFs) have dropped by 4% in the past month. This decline comes as investors get ready for Dhanteras, a key time for gold buying. Domestic gold prices are now around ₹1,42,000 per 10 grams. This is down over 20% from a peak of nearly ₹1,80,000. Geopolitical tensions in the Middle East, a stronger US dollar, and high interest rates have pressured gold prices. These factors raise concerns about the long-term growth of gold, according to a report from Axis Direct.
Key Details
Despite this recent drop, gold has returned nearly 8% since last Dhanteras. This performance has outpaced the Nifty 50 index. Analysts believe the current price drop may give investors a chance to rethink their gold investments during the festive season. Interest in gold ETFs remains strong, with net investments in October estimated at around ₹3,300 crore.
Background
In 2025, gold ETFs attracted about $89 billion in inflows. This is much higher than the $3.4 billion seen in 2024. The trend has continued into 2026, with inflows reaching around $39 billion through September. The total assets under management (AUM) for gold ETFs grew from about ₹1,58,400 crore in April 2026 to ₹1,91,000 crore in October. This shows increased participation from domestic investors.
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The drop in gold prices could lead to less interest in gold ETFs. This may affect sectors related to precious metals. Investors might shift their focus to equities due to lower gold prices. Keep an eye on trends in gold purchases as Dhanteras approaches. These trends could significantly influence market dynamics.
Based on reporting by: livemint.com, moneycontrol.com