National News
Indian Gold ETFs Saw A Sharp Reversal In May:WGC
Outflows Were Likely Driven By Profit-Taking Following The Mid-May Import Duty Hike Of 9% That Pushed Domestic Gold Prices and The Traded Price Of ETFs Sharply Higher
WGC Gold Update shows that Indian gold ETFs saw a sharp reversal in May, mirroring the softer trend seen in global gold ETF flows. Domestic gold ETFs recorded their first monthly net outflow since April 2025: net outflows stood at INR 7.25bn (US$76mn), the largest on record in rupee terms. Gross redemptions also rose to a record INR33.30bn (US$348mn), highlighting the scale of selling during the month. Despite this, overall holdings were broadly steady at 116.5t, in line with our estimates, while total AUM stood at INR1,846bn (US$19.3bn).
Outflows were likely driven by profit-taking following the mid-May import duty hike of 9% that pushed domestic gold prices and the traded price of ETFs sharply higher. INR gold prices rose by around 6% soon after the hike, prompting investors to lock in gains. This was also visible in folio data: investor accounts declined by 134,343 in May, the sharpest monthly fall on record, bringing the total number of active folios to 12.3mn. The high redemptions and reduction in folios suggest that some investors used the price rise to trim or exit their gold ETF positions.
But the outflows appear to have been short-lived. Flows turned positive again in early June, with net inflows of INR 16.31bn (US$171mn) between 1–11 June, suggesting that investor interest in gold ETFs remains strong.
Separately, several fund houses introduced temporary limits on large investments into gold ETFs (with direct subscriptions capped at INR 25cr/~US$2.6mn) and gold ETF fund-of-funds (lump-sum investments capped at INR 10 lakh /~US$10.6k per PAN per calendar month). Although the fund houses have pointed to prevailing market and economic conditions, these measures come amid broader concerns around gold imports, external balances, currency pressures, and the Prime Minister’s appeal to consumers to curtail their gold buying. Given that large investors account for a sizeable proportion of AUM, the cap on investment could limit inflows into fund houses to some extent, although they can continue to buy from the secondary market where authorised participants and market makers continue to operate and provide liquidity.
By investor category, the Association of Mutual Funds of India (AMFI) data shows that as of March’26, corporates accounted for 58% of gold ETF AUM, followed by high-net-worth individuals (HNI) 31%, and retail 11%.
National News
Augmont-NSE Partnership Drives Strong Start for India’s Gold EGR Market, with Over 1,60,357 Units Traded in First Few Hours
Electronic Gold Receipts segment witnesses active two-way trading on day one, with 1,60,375 units traded, representing approximately 6 kg of gold and a traded value of ₹23.34 crore as of 04:25 PM
India’s gold market took an important step towards greater integration with the commencement of live trading in the Electronic Gold Receipts (EGR) segment on the National Stock Exchange of India (NSE) today. Enabled through the collaboration between NSE and Augmont Enterprises Limited, the launch brings together NSE’s regulated exchange infrastructure and Augmont’s integrated physical gold ecosystem, creating a new avenue for investors to trade physically backed gold.
On its opening day, the EGR segment witnessed active two-way trading, with 1,60,357 units traded by approximately 04:25 PM, representing around 6 kg of gold. The trading activity translated into a cumulative traded value of approximately Rs.23.34 crore during the first session. The segment also demonstrated orderly price discovery, with prices remaining within a narrow intraday range of Rs.1,450.50 to Rs.1,460.00. The bid-ask spread remained between Rs.0.50 and Rs.1.00, indicating continuous two-way quotations and an active order book.
Each EGR represents 100 mg of physical gold, with the underlying gold held in SEBI-regulated vaults. Investors can buy and sell EGRs through their demat accounts on the exchange, while retaining the option of converting their holdings into physical gold, subject to the applicable framework. The segment follows a T+1 settlement cycle, under which trades executed on a particular day are settled on the next business day, facilitating the transfer of securities and funds through the exchange’s regulated clearing and settlement mechanism.
Under the strategic collaboration, Augmont serves as a key physical gold and infrastructure partner for NSE’s EGR segment, supporting the creation, vaulting, redemption and liquidity ecosystem. The gold backing the EGRs is sourced through Augmont’s integrated refining infrastructure, bringing together physical gold processing and exchange-based trading within a regulated framework.
The commencement of live trading marks an important step towards building a more transparent and accessible gold market in India. By enabling standardised gold to be traded through an exchange-based mechanism, EGRs have the potential to strengthen price discovery, improve market participation and create a more integrated ecosystem for physical gold.
Ketan Kothari, Whole-time Director, Augmont Enterprises Limited, said:
“The commencement of EGR trading marks the transition of our collaboration with NSE from building the underlying infrastructure to enabling a live, exchange-traded gold market. The day-one trading activity, continuous two-way quotations and orderly price discovery are important initial milestones for a new market segment.
At Augmont, we have brought together our refining capabilities and physical gold infrastructure to support the creation, vaulting and redemption of EGRs. We believe this initiative can play an important role in making physical gold more accessible, transparent and integrated with India’s formal financial ecosystem. Our focus remains on strengthening the ecosystem and supporting its wider adoption among investors, brokers and other market participants.“
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