India’s gold ETF holdings rose 42% year-on-year to 66.68 tonnes as of June 30, 2025, with AUM surging 88% to Rs 64,777 crore.

The number of investor accounts expanded 41% to 76.54 lakh, reflecting growing preference for digital gold investments and this shift from traditional jewelry ownership to tech-enabled investment channels is being driven by Gen Z investors, fractional ownership models, and the influence of social media and fintech innovations, according to a release by Ventura.

Global gold demand in Q2 2025 stood at 1,249 tonnes, up 3% year-on-year, with investment demand and ETF inflows offsetting weaker jewelry consumption. Central bank gold holdings worldwide rose to 36,345 tons, with India’s reserves at 880 tonnes.

AUM increased 88% YOY from Rs 34,356 crore to Rs 64,777 crore in June 2025. A four-year increase being 299%. Number of accounts increasing 41% YOY from 54.10 lakhs to 76.54 lakhs in June 2025. A four-year increase being 317%.

“Gold’s strategic role in portfolios has strengthened as investors navigate an era of slower global growth, policy uncertainty, and elevated geopolitical risks. With inflationary pressures, a softening US dollar, and anticipated US Fed rate cuts, we see sustained upside potential in gold prices through the remainder of 2025. Our analysis indicates COMEX Gold could test the $3,600 mark by year-end, supported by strong ETF inflows, steady central bank buying, and robust retail participation in India’s gold investment market,” said NS Ramaswamy, Head of Commodities, Ventura.

On the other hand, in global gold ETFs, Gold Holdings increased 16% YOY from 3106 tonnes to 3616 tonnes as on 30th June 2025 and the AUM increased 64% YOY from $233.30 billion to $383 billion as on 30th June 2025

The release further hints that Gold prices are expected to remain elevated in the second half of 2025 and this is supported by macroeconomic headwinds, geopolitical tensions, and robust investment demand.

“Ventura expects Comex Gold to touch US$3,600 by year-end, after hitting a record high of US$3,534.10 on August 7, 2025, surpassing the previous peak of US$3,509.90 set in April 2025,” the release said.

Over the past 20 years, gold has delivered positive annual returns in 14 calendar years, reinforcing its status as a proven store of value and a hedge against inflation. Recent performance underscores its resilience, with average annual returns of 23% over the last three years compared to 11% for the Nifty 50.

In volatile market conditions, gold’s negative correlation to equities has provided effective diversification, cushioning portfolio losses during sell-offs while participating in upswings.

The best annual performance was in 2007 of 31.59% (Start of the Great US Recession - Global Financial Crisis - Subprime mortgage crisis - Collapse of Lehman Brothers). On the other hand, the worst annual performance was in 2013 of -27.79% (US Economic Recovery - Chinese Infra Expansion -Global Currency Volatility - EU Stagnation - Oil Price Plunge).

India’s Foreign Exchange Reserves week ended August 1, 2025 was $688.87 billion (Highest $704.89 billion in Sep’24)

Looking ahead H2 2025, Gold retains upside potential with pronounced volatility, COMEX Gold forecast is $3600. Geopolitical risks leading a safe-haven appeal and Growth in ETF retail participation.

Courtesy : Economic Times