Gold ETF: Forget gold, Gold ETF did wonders, turning Rs 10 lakh into Rs 1 crore..
While investors in the stock market are searching for multi-bagger stocks, gold is quietly brightening the portfolios of those who have held it for a long time. Gold prices are already experiencing a spectacular surge these days. Meanwhile, there's another option for investing in gold that has delivered bumper returns to investors. We're talking about gold ETFs. The country's oldest gold ETF, Nippon India ETF Gold BeES, has delivered a whopping 950% return since its launch in 2007. This means that if someone had invested ₹10 lakh in it 18 years ago, they would have amassed over ₹1 crore today.
Gold is currently breaking records in both global and Indian markets. In India, the price of gold in the futures market has crossed ₹1.22 lakh per 10 grams, and silver has reached over ₹1.5 lakh per kg. In the global market, gold is trading at over $4,000 per ounce. This is because investors are flocking to safe havens amid inflation, geopolitical tensions, and stock market volatility. Support from billionaires: Gold crossed the historic $4,000 per ounce mark this week, supported by prominent billionaires.
American billionaire Ray Dalio has suggested that investors should hold about 15% of their portfolio in gold. He told Bloomberg that gold is a great way to balance your portfolio, especially when most investments rely heavily on debt. Dalio says gold performs well even when other assets decline. He also advised avoiding "dead assets," i.e., certain government bonds, because credit spreads are very low.
Nippon India Gold ETF
Investors currently have ₹24,000 crore invested in Nippon India Gold BeES. It has grown by over 56% in the past year, and over 18 years, it has increased by 950% at a CAGR of 13.5%. These returns remind us of times like the dot-com crash, the 2008 financial crisis, and the 2020 COVID shock, when people fled to gold for safety. Gold ETFs in India saw record monthly inflows in September, with total managed assets reaching $10 billion. So far this year, gold ETFs have attracted $2.18 billion in investments, breaking all previous records. In comparison, investments in 2024 were $1.28 billion, in 2023 $295.3 million, and in 2022, only $26.8 million. After a 21% increase last year, gold prices have risen 60% so far in 2025.
The Game of De-Dollarization
The primary reason behind gold's surge is de-dollarization. When the dollar's value falls, its price rises. In the first quarter of 2025, the dollar's share in central bank reserves fell to just 43%. Countries like China (6.8% of gold reserves) and Russia (37.1% of gold reserves) are accelerating their gold purchases. Russia purchased 274 tons of gold in 2018 and sold almost all of its US Treasury holdings. Central banks' gold purchases have nearly doubled over the past 10 years.
Geopolitical uncertainty, central bank purchases, expectations of a Federal Reserve interest rate cut, and questions about the Fed's independence have further strengthened gold. The US government shutdown is in its second week, delaying economic data. Nevertheless, traders are expecting a 25 basis point rate cut in October and December.
Experts' Advice
In an ET report, Tata Mutual Fund says investors should stay invested in gold for the long term. Consider any small price declines as an opportunity to buy. They believe gold remains a solid investment amid inflation, geopolitical tensions, and fears of currency depreciation. They suggest investing in a 50:50 ratio between gold and silver, as silver is also looking quite attractive.
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