Are gold ETFs a good bet in the current market climate?
In the recent past we have seen a significant uptick in investor interest in gold exchange traded funds. In the month of August alone, gold ETFs have witnessed the highest inflows in last 16 months: The question we are asking today, is it time to invest in the yellow metal?
In the ever-evolving landscape of investment opportunities, gold exchange-traded funds (ETFs) have recently taken center stage. The month of August marked a significant upswing in investor interest, as gold ETFs saw their most substantial inflows in the past 16 months. Now, a question occupies the thoughts of many investors, if this is the right time to invest in the coveted yellow metal.
Gold ETFs are financial instruments that serve as electronic representations of physical gold, securely stored electronically in a dematerialised (demat) account. These ETFs are listed on stock exchanges, providing investors with real-time price updates and the opportunity to buy and sell units just like stocks.
The biggest benefits of gold ETFs are liquidity, there is no exit load, diversification in your portfolio and easy trading.
To gain deeper insights into the current state of gold ETF investments and their future prospects, CNBC-TV18 spoke with Ghazal Jain, Fund Manager - Alternative Investment at Quantum AMC.
Also Read | Gold ETFs witness highest inflows in 16 months: Is it time to invest in the yellow metal?
According to Jain, "Inflows into the gold ETF category over the last year or so have been subdued, mostly due to the US Federal Reserve's monetary policy tightening, which reduced interest in gold for investors. However, over the last few months, we have seen steady inflows, even amidst robust domestic equity markets."
Jain emphasised the prudence of investors considering gold at this stage, stating, "Looking ahead, we are approaching the end of the monetary policy tightening by the Fed. This has improved the prospects for gold going forward. Hence, we believe that the momentum in gold ETF inflows we have been witnessing should continue for the rest of the year."
For full interview, watch accompanying video
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