Due to the surge in tariffs, global uncertainties, and purchases by global central banks, gold prices have surged, leading investors towards gold exchange-traded funds. This has resulted in a six-fold jump during September.
Gold has become a lucrative investment alternative due to the regressive domestic stock market. Investment into Gold ETFs has risen by 578.28 per cent or 8363.13 crore in September 2025. The same was just 1,232.99 crore last year in the same quarter, according to the Association of Mutual Funds in India, data.
Gold ETFs have gold as their underlying asset, which gives an option to hold gold electronically rather than in physical form. This is seen as a false option to acquire gold due to safety and no issues regarding the purity of the metal. Ashwini Kumar, Senior Vice President and Market Data Head at ICRA Analytics, said that the global geopolitical headwinds, including tariff pressures, have pushed confidence in the bullion. He also highlighted that due to its liquidity, cost-effectiveness, transparency, and ease of trading, it is preferred by investors.
Gold ETFs also drive a higher return, boosting their popularity. Investors looking to diversify their investment portfolio and inflation protection often prefer them. The rate cuts implemented by the US have also driven investors towards it. This has also shot the price of gold to 1,25,000 for 10 grams.
Another boost to gold ETF has been given through the tax clarity provided in the 2025 budget. Earlier, they were taxed according to individual tax slabs, but the budget this year clarified that for 12 months, the gold ETFs will be taxed at 12.5 per cent. Experts further believe that due to global situations and a weak dollar, gold ETFs will remain a strong choice for investors.
A market expert stated that this was a strong reason to be ‘bullish’ on gold and hence on gold ETFs in the medium term.
