India’s Gold ETFs Experience First Monthly Outflow in a Year as Investors Opt to Book Profits

Gold ETFs in India experienced their first net monthly outflow in a year during May, with outflows amounting to $61 million, equivalent to 0.4 metric tonnes. This dip reduced total holdings to 116.3 tonnes, according to data from the World Gold Council. The recent uptick in domestic gold prices, reaching ₹164,497 ($1,717) per 10 grams—its highest in over two months—was primarily driven by India’s substantial hike in import duties on gold and silver from 6% to 15% on May 13.

The shift in investment behavior can be attributed to a combination of profit-taking by investors and curbed import demand stemming from increased costs. The higher import duties aim to manage India’s trade deficit and stabilize the rupee, which has been facing depreciation pressures. Despite the net outflows in May, gold ETFs have seen significant net inflows of $3.48 billion in 2026, indicating an overall bullish sentiment earlier this year, driven by investors seeking safe-haven assets amid global economic uncertainties.

In the short term, traders and investors may remain cautious as they assess the implications of the recent policy changes and fluctuating prices. The potential for further profit-taking could lead to increased volatility, particularly if domestic demand weakens due to higher import costs. However, the persistent global demand for gold as a hedge against inflation and economic instability may sustain investor interest, suggesting that any price corrections could present buying opportunities for those looking to enter the market.

Source: Market Source

(Expert Note: This report was independently prepared by the Wealthova Commodities team.)