The gold and silver holdings of domestic mutual funds (MFs) crossed the Rs 1 trillion mark for the first time in September, powered by a blistering commodity rally that lifted precious metal prices and drew fresh inflows into dedicated MF schemes.
The assets under management (AUM) of gold exchange-traded funds (ETFs) alone have crossed $10 billion.
Gold and silver prices have been scaling new highs for several months, driven by central bank buying and surging investor demand amid global uncertainties.
Mounting concerns over the US economy and an ongoing government shutdown have added further impetus to the rally.
As of September 30, gold prices were up 53 per cent over the past year, while silver prices had surged nearly 60 per cent during the same period.
The price rally, coupled with a lack of other cost-efficient investment avenues, has broadened the investor base for commodity ETFs over the past year.
The number of gold and silver ETF investment accounts, or folios, rose nearly 50 per cent in the 12 months ending August 2025.
This rise in investor participation translated into higher inflows.
Between September 2024 and August 2025, gold ETFs recorded net inflows of Rs 16,560 crore, while silver ETFs attracted Rs 11,300 crore.
Gold and silver ETFs likely saw record inflows in September, with combined AUM surging nearly 30 per cent during the month to Rs 1.3 trillion.
Gold ETFs accounted for Rs 90,117 crore, while silver ETFs managed Rs 37,508 crore, according to data from the Association of Mutual Funds in India.
AUM growth depends on two factors: fresh inflows and the impact of market movements on the valuation of underlying securities.
Experts say that while gold and silver prices have run up sharply and are now trading near fair-value ranges by some models, the rally may still have legs.
“The current bull market is being driven largely by central bank purchases and is reflected in a weaker US dollar and other currencies.
"Prices have approached the fair-value zone. However, the bull market seems far from over — it may pause for an extended period, and meaningful pullbacks could offer chances to invest,” DSP MF said in its monthly Netra report.
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