Assets of gold exchange-traded funds (ETFs) in India scaled a fresh peak of R11,198 crore in September, at a time when the government is considering steps to discourage conversion of household savings into an idle asset like the precious metal.

The assets under management of gold ETFs surged from R10,701 crore in August, showed the data compiled by the Association of Mutual Funds in India. In June, assets of gold ETFs crossed the psychological R10,000-crore mark, more than the double of the level achieved in May 2011.

Gold ETFs recorded Inflows worth R500 crore in the last quarter, after witnessing investments of over R3,600 crore in 2011-12 and R2,250 crore in the previous fiscal. Assets of gold ETFs have jumped over 80 times since their introduction in April 2007, while investor wealth in debt mutual funds have grown around 11 times to R33,000 crore and equity mutual fund assets have climbed 30 times to R1,63,000 crore, said a senior executive with a Mumbai-based asset management company.

Gold?s safe-haven status and ability to act as an effective hedge against inflation have been driving investor interest despite doubling of import duty on the precious metal to 4% and the rupee depreciation. The rise in assets of gold ETFs also reflects the growing acceptance of such products among Indians, the world?s largest buyer of jewellery, as a hassle-free and safe instrument to invest in, also due to their risk-free nature and zero storage cost.

Although gold is off its peak, it is up nearly 12% so far in 2012 after recording an 11th straight annual gain in 2011 ? the longest winning streak in at least nine decades ? outperforming commodities, equities as well as treasuries. US gold futures remained almost unchanged at $1,764.60 at the intra-day trade on Wednesday.

Currently, as many as 14 fund houses offer 25 different gold ETF schemes. ETFs are the investment instruments that trade like shares but are backed by physical holdings of the commodity. They are traded on the National Stock Exchange and Bombay Stock Exchange and offer investors an opportunity to participate in the gold market without taking physical delivery.

India is the world?s largest gold consumer with an annual demand of more than 950 tonnes.