New Delhi: Over the past year, gold has given huge profits to Indian investors. On 11th September 2024, the price of 24-karat physical gold was around Rs 73,200 per 10 grams.
Now, one year later, it has risen sharply to Rs 1,12,500 per 10 grams — a jump of nearly 54%.
Gold ETFs (Exchange Traded Funds) have followed this rise closely. In the last 12 months, these funds have given average returns of up to 50%.
In August 2025 alone, gold ETFs received a net inflow of Rs 2,189.5 crore — marking the fourth month in a row with inflows.
According to AMFI, their assets under management (AUM) reached a record Rs 72,495 crore, showing a 74% increase in investments for August.
What is a Gold ETF and How Does it Work?
A Gold ETF is a stock-market fund that tracks the price of gold. When gold prices increase, the value of your ETF units also rises.
You can buy or sell these ETFs anytime during market hours through your demat and trading account, just like stocks.
Benefits of Investing in Gold ETFs
Safety: No need to keep physical gold, so no risk of theft or worries about purity.
Transparency: Prices are updated on the stock exchange, so it’s easy to track.
Liquidity: You can buy or sell anytime during market hours.
Low Entry Barrier: You can start investing with a small amount.
Risks of Gold ETFs
Subject to stock market ups and downs, so short-term price changes can happen.
Expense ratio (management fees) slightly reduces returns.
Risk of loss if gold prices fall over the long term.
Physical Gold vs Gold ETFs
Traditionally, Indians prefer physical gold like jewellery, coins, or biscuits — especially for weddings and family occasions.
However, owning physical gold means you need to think about storage, making charges, and checking purity. Gold ETFs offer a modern, hassle-free way to invest without these problems.
Other Ways to Invest in Gold
Physical Gold: Jewellery, coins, and biscuits.
Gold ETFs: Traded on stock exchanges via demat accounts.
Gold Mutual Funds: Invest indirectly in gold ETFs.
Sovereign Gold Bonds (SGBs): Government bonds that pay interest along with gold price benefits.
Key Takeaway for Investors
Both physical gold and Gold ETFs have rewarded investors well over the last year.
Physical gold fits emotional or traditional preferences, while ETFs are more convenient and secure for modern investors.
But remember, don’t invest just because of past returns. Gold prices depend on global markets, the dollar-rupee exchange rate, and geopolitical events.
Always consider your investment goals, time frame, and risk tolerance before investing.
