Gold glitters again; should you raise exposure to digital gold via ETFs? Experts say this | Mint

Gold prices: Since the price of gold has been skyrocketing due to volatility arising out of Donald Trump’s tariffs, many retail investors are tempted to invest in the yellow metal. On Wednesday, gold bullion prices in Delhi were at ₹95,820 per 10 gms, while the corresponding prices in Mumbai were ₹95,990 per 10 gms. Check the table below for the prices in other cities. On a year-to-date basis, gold has delivered an impressive 25 per cent return. 

The ongoing rally will definitely prompt several investors to start investing in digital gold or exchange-traded funds (ETFs). Meanwhile, the other option to invest in digital gold is through sovereign gold bonds (SGBs), which will soon come to an end as the government plans to discontinue them.

There are a total of 20 gold ETFs with a total asset size of ₹58,887 crore, shows the latest Association of Mutual Funds in India (AMFI) data. Interestingly, there was an outflow of ₹77 crore in March 2025.

Advantages of investing in gold

Traditionally, gold is considered a safe investing option among the middle class who tend to invest in physical form. This, however, entails the making charges and the cost of storage i.e., locker fee, etc.

In contrast, if you invest in the digital version of gold by buying units of gold ETFs, you not only get seamless exposure to gold prices but also happen to save on these charges. This convenience, coupled with growing gold prices, has attracted higher investment in gold funds.

Gold and Silver ETFs are seeing a higher demand from investors, says Siddharth Srivastava, Head, ETF Product & Fund Manager, Mirae Asset Investment Managers (India).

“In the past one year, commodity ETFs have seen an inflow of around ₹24,000 crore and almost ₹13,500 crore in the last six months, taking the total AUM to more than ₹74,000 crore as of March 31, 2025. The increase is driven by the good performance of both precious metals and increasing acceptance of commodity ETFs, which provide a low-cost, safe, high-purity and highly liquid way of investing in these precious metals,” he explains.

Is consolidation ahead?

Although it is common among retail investors to get attracted to a rising tide, any sudden jump in asset prices usually follows a correction. With stock prices again on the rise, the prices of safe-haven assets such as gold could be headed for a correction.

“When there is uncertainty in the market, gold prices tend to appreciate. But the prices will not always stay at these levels. They will correct in some time. However, 10 per cent exposure to gold is not a bad thing,” says Sridharan S, a Sebi-registered investment advisor and founder of Wealth Ladder Direct.

“Gold is up by around 30 per cent in the last year. So, while some consolidation or price correction may happen, we believe the underlying supporting factors for gold continues. Anyone looking to invest now should do so from a long-term asset allocation perspective, not just for short-term gains,” Srivastava adds. He further recommends to invest in a staggered manner.

“If one has to take fresh exposure, buying on dips and going slow will be a much better strategy. Gold will always have a place in one’s portfolio basis the risk profile. But going overboard on only one asset class only increases the risk,” said Abhishek Dev, Co-Founder and CEO, Epsilon Money.

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