Gold ETFs witnessed a dramatic 570% surge in inflows to ₹3,443.23 crore in June 2026, completely reversing the ₹725 crore outflow seen in May, according to AMFI data. This represents a significant shift from the record outflows of $8.9 billion in June that had marked the fourth straight losing month for gold ETFs. The inflows came amid escalating US-Iran tensions and broader geopolitical uncertainty in the Middle East, demonstrating how quickly market sentiment can shift based on geopolitical developments. Gold ETF's average assets under management (AUM) stood at ₹1.76 lakh crore in June 2026, compared to ₹1.83 lakh crore in May 2026, showing the scale of the reversal in investor sentiment. As per Morningstar Investment Research India, the June recovery suggests the weakness seen in May was temporary rather than a change in investor sentiment towards gold, with the sharp surge in inflows reflecting continued appetite for long-term portfolio diversification.
Mutual fund systematic investment plan (SIP) inflows touched a three-month high of ₹31,781 crore in June, increasing 3% month-on-month and 17% year-on-year despite volatile market conditions amid West Asia conflict, as per AMFI data. SIP contributions increased by ₹827 crore from ₹30,954 crore in May, with year-on-year inflows rising by ₹4,512 crore from ₹27,269 crore recorded in June 2025. The equity-oriented mutual fund schemes also witnessed robust investor interest, with net inflows rising nearly 26% month-on-month to ₹28,973.41 crore in June from ₹22,907.77 crore in May. Mid-cap funds attracted the highest net inflow of ₹6,090.17 crore, followed by small-cap funds at ₹5,601.96 crore and flexi-cap funds at ₹5,231.31 crore. The industry's total assets under management stood at ₹82.22 lakh crore at the end of June, while total number of mutual fund folios rose to 27.86 crore.
The May outflows were primarily attributed to the government's steepest-ever customs duty hike on gold from 6% to 15%, which led to a spike in domestic prices and prompted investors to lock in profits. As per Umesh Sharma, CIO – Debt, The Wealth Company Mutual Fund, outflows were likely driven by profit-taking following the mid-May import duty hike that pushed domestic gold prices and the traded price of ETFs sharply higher. Investors reduced their overall exposure amid this price volatility, creating the temporary weakness that characterized May's performance. However, according to Nehal Meshram, Senior Analyst, Morningstar Investment Research India, as international and domestic gold prices cooled off in the weeks following the initial duty-driven rally, investors used the correction as an opportunistic entry point. The correction in gold prices after the duty-driven rally encouraged investors to return to the category, with the June rebound capping a strong first half of CY2026 for Gold ETFs.
The June rebound also capped a strong first half of the calendar year for Gold ETFs, with Gold ETFs recording cumulative net inflows of around ₹37,319 crore during the first half of CY2026, substantially higher than the ₹8,021 crore mobilised during the same period last year, according to Morningstar. The research firm noted that the increase reflects sustained demand for safe-haven assets amid elevated geopolitical uncertainty, concerns over global economic growth and uncertainty around the path of global interest rates. As per Meshram, while inflows were heavily front-loaded, led by the exceptionally strong collections witnessed in January, the first-half mobilisation highlights the growing role of gold within investor portfolios as a strategic allocation and store of value. She added that the renewed inflows in June indicate investors continue to maintain a favourable view on gold while balancing growth-oriented investments with defensive portfolio allocations.
Gold recorded its fourth straight losing month as the metal fell 11.7% amid multiple headwinds. According to World Gold Council (WGC), New Fed Chair Kevin Warsh signaled a hawkish stance, and the US-Iran conflict lifted inflation fears, raising expectations of higher rates ahead. Rising real yields and a stronger dollar increased the opportunity cost of holding non-yielding gold. The precious metal has declined 6% year-to-date and shed over 1% this week on concerns over renewed conflict in West Asia. Colin Shah noted that the trend is likely to remain volatile as markets are rapidly recalibrating their risk appetite based on real-time developments. Despite recent volatility, gold continues to play an important role in a diversified investment portfolio, particularly during periods of economic uncertainty, inflation and geopolitical risks.
