While the domestic equity markets faced a cooling period in late 2025, Indian investors pivoted sharply toward “digital gold.” December 2025 capped off an unprecedented year for precious metals, with gold ETFs attracting more capital in a single month than they typically see in an entire year.
By the end of December, the combined Assets Under Management (AUM) of gold and silver ETFs in India crossed the ₹2 trillion ($24B) milestone—doubling in just four months.
Why Investors Poured into Gold in December
The “flight to safety” was driven by a perfect storm of global and domestic factors:
- Price Momentum: Domestic gold prices shattered records 53 times in 2025, surging 75% over the year to breach ₹1.3 lakh per 10 grams by December.9
- Equity Volatility: With equity mutual fund inflows dipping by 6% in December, investors shifted to gold to hedge against a perceived “AI-bubble” and global trade uncertainties.10
- Geopolitical Tensions: Conflicts in the Middle East and the recent U.S. military activity in Venezuela sustained high safe-haven demand.11
- Currency Weakness: A weakening US Dollar and the depreciation of the Rupee amplified the returns for domestic gold investors.12
2025: A Year of Broken Records
India has emerged as a global leader in gold investment, ranking second only to the United States in total ETF inflows for December 2025.13
| Metric | 2025 Data (Annual) | 2024 Comparison |
| Total Annual Inflow (India) | $4.68 Billion | $1.29 Billion |
| Gold Price Appreciation | ~75% | ~15% |
| Total ETF Folios | 9.5 Million+ | 5.1 Million |
| Global Ranking (Dec) | #2 (behind USA) | #4 |
The “Digital Shift” in Indian Households
Traditionally, Indian gold demand was satisfied through jewelry and coins. However, 2025 marked a structural shift:
- Lower Entry Bar: Retail investors can now start gold SIPs for as little as ₹100.
- Tax Efficiency: Many investors are opting for ETFs over physical gold to avoid the 3% GST on purchases and storage concerns.
- Liquidity: The daily trading volume for Indian gold ETFs reached record highs in December, allowing for instant “buy-and-sell” maneuvers as prices fluctuated.
Outlook for 2026: Will the Glitter Last?
Major institutions like Goldman Sachs and the World Gold Council remain bullish, predicting that gold could rise another 20–30% in 2026.15 With the Reserve Bank of India (RBI) expected to continue its gold-buying spree and the U.S. Federal Reserve entering a rate-cut cycle, the “zero-yield” disadvantage of gold is fading.
“Gold has transitioned from a tactical hedge to a core portfolio component for the Indian middle class.”16 — Industry Analyst, Jan 2026
