Gold ETFs achieved a historic milestone with record third-quarter inflows of $31 billion, marking the strongest quarterly performance on record according to the World Gold Council. This represents a 9% increase in total AUM and 211 tonnes of collective holdings growth during Q3. The strong quarterly performance was led by European and North American-listed funds, with the US recording the largest inflows followed by impressive contributions from UK-listed funds. The UK achieved its strongest quarter on record, helping Europe achieve the same milestone at the regional level. Despite the record inflows, global physically backed gold ETFs attracted $10 billion in September alone, with the World Gold Council noting that some investors saw the pullback as a chance to build or maintain strategic positions.
Gold ETFs recorded their highest monthly collections since January 2026 with ₹4,451 crore in September 2026, representing a sharp 71% increase from August's ₹2,597 crore, according to the Association of Mutual Funds in India (AMFI). More significantly, nine-month collections have already surpassed the entire 2025 total, with gold ETFs attracting approximately ₹45,925 crore between January and September 2026, compared to ₹42,961 crore for the full previous year. As reported by Morningstar Investment Research India's Nehal Meshram, this means inflows during the first nine months of 2026 have already exceeded full-year 2025 collections by ₹2,964 crore, or approximately 6.9%. The September surge came even as gold prices corrected by 3.5% during the month, with gold starting September at $4,328 per ounce and closing at $4,157, before falling further to $4,141 per ounce by October 15. The World Gold Council reports that global holdings rose 67 tonnes to a record 4,256 tonnes, with assets under management reaching $574 billion at the end of September.
Despite the record inflows, gold prices experienced significant volatility during September. International gold prices peaked at around $4,474 per ounce in September before falling to nearly $4,115 on September 28, according to Trading Economics data. Domestic gold prices followed a similar trend, with MCX spot gold declining more than 4.9% from its September 9 peak of ₹1,54,257 per 10 grams to ₹1,46,677 towards the end of the month. On October 12, gold was trading around ₹1,47,842 per 10 grams at 1 pm IST, demonstrating that gold ETFs continued attracting net investments despite the correction in the underlying metal's price. As reported by Anand Rathi Wealth's Adil Chacko, the 3.5% correction in September may have encouraged investors to buy Gold ETFs, while expectations of further price gains may also be influencing investment decisions. The World Gold Council's Gold Return Attribution Model (GRAM) suggests that rising yields and a stronger US dollar were major contributors to September's drop, with the US 10-year Treasury yield climbing 53 basis points to 5.3% and the DXY rising 2%.
Asian investors dominated the latest inflows, with Chinese investors contributing $365 million and Swiss investors adding $223 million, while US investments were negative at $132 million. Year-to-date, Asian investments have reached $17.72 billion, followed by European investments at $17.38 billion and North American investments at $4.12 billion. The US led inflows in the week ending October 2 with $686 billion, demonstrating the shifting regional dynamics of gold ETF investment. European-listed gold ETFs saw inflows of 21.7 tonnes, valued at $3.6 billion, with UK demand being the largest contributor to the region's inflows. Across the Atlantic, UK funds recorded inflows in 12 of the 13 weeks through September 25, the most consistent run since 2022, suggesting sustained investor interest rather than a reaction to single events. According to Chacko, geopolitical uncertainty, inflation concerns and gold's role as a hedge were key factors behind the September inflows, with tensions in West Asia and crude oil prices remaining elevated naturally increasing demand for gold. The World Gold Council points to several factors that may have reinforced gold's appeal as a diversifier: persistent inflation and elevated energy prices, concerns over equity valuations, particularly in AI-related sectors, increased bond-market volatility, and continued inflows suggesting some investors saw the price pullback as a chance to build strategic positions.
In India, the interest in gold ETFs was no different from global trends, with net inflows rising by 71.4% to ₹4,451 crore in September compared to ₹2,597 crore in August, according to the latest AMFI data. MCX spot gold has gained ₹12,468 per ten grams (24 carat) so far in 2026, rising from ₹1,32,614 on January 1 to ₹1,45,082 on October 15, 2026. In comparison, gold in dollar terms has fallen from $4,319 to $4,141, down by 4% during the same period. The gap between the two reflects the rupee's depreciation of 5.5% year-to-date against the US dollar and the hike in import duty prices of precious metals earlier in the year. The World Gold Council noted that Indian funds continued to attract money, potentially supported by a pullback in domestic equities, opportunistic dip buying and rising demand for portfolio diversification. Looking ahead, October's Fed meeting and the direction of bond yields will show whether the dip buyers or the yield story wins out, with the Fed futures market signalling over a 70% probability of a rate pause at the October FOMC meeting.
Looking ahead, gold may remain range-bound with a mildly positive bias, supported by domestic demand and rupee weakness, according to Aspect Bullion & Refinery's Darshan Desai. Key factors driving price movements include US inflation data, Federal Reserve signals, and geopolitical developments. The precious metal's decline since 2024, when it had a sparkling rally on hopes of interest rate cuts and geopolitical tensions, reflects current market conditions including rising treasury yields and investor shifts toward crude oil. However, continued inflows suggest that some investors viewed the price pullback as an opportunity to build or maintain strategic positions rather than reduce exposure, with persistent inflation and equity valuation concerns reinforcing gold's appeal as a portfolio diversifier. The rise of more than 25% in India VIX from its September lows indicates heightened market uncertainty that can encourage investors to seek hedges, supporting continued gold ETF demand. The World Gold Council suggests that whether investors focused less on near-term policy rates and more on bigger fiscal and term-premium risks remains to be seen, which could continue to support gold demand, though how the bond market moves and how the dollar and gold react is likely to stay uncertain until the US midterm elections on November 3.
