In the last one year, gold has given massive to investors. If we look at the price of physical gold, the price of 24 karat gold was around Rs 73,200 per 10 grams on 11 September 2024. One year later, its price has increased to Rs 1,12,500 per 10 grams. That is, a jump of about 54%.
At the same time, those who invested in gold ETFs also got great returns. In the last one year, gold ETFs have given an average return of up to 50%. In August 2025 itself, a net inflow of Rs 2,189.5 crore came in gold ETFs, which is the inflow for the fourth consecutive month. According to the Association of Mutual Funds in India (AMFI), the asset under management (AUM) of gold ETFs reached a record Rs 72,495 crore during this period. Investment flow in gold ETFs has jumped by 74% in August.
What is a gold ETF and how does it work?
Gold ETF is an investment instrument that is traded in the stock market. It tracks the price of gold, that is, if the price of gold increases in the market, then the price of your ETF will also increase. Investors can buy gold ETF through demat account and trading account. It can be bought and sold in the market at any time like shares.
Benefits of investing in gold ETFs
Security: There is no need to keep gold physically in it, so there is no worry of theft or purity.
Transparency: Prices are listed in the market and can be easily tracked.
Liquidity: Facility to sell and buy anytime.
Facility of small investment: One can start with a small amount also.
Risks of gold ETFs
It is linked to the stock market, so it is affected by market volatility.
An expense ratio (fund management charge) has to be paid in this, which may reduce returns a little.
If the price of gold falls in the long term, there may be a loss.
Investment in physical gold
Indian investors traditionally prefer to buy physical gold i.e. jewelry, coins or biscuits. But there are issues like storage expenses, making charges and purity. Still, its demand always remains due to marriage and family reasons.
Warning for investors
Investment decisions should not be taken only by looking at past returns. Gold prices often depend on the international market, dollar-rupee exchange rate and geopolitical conditions. Therefore, returns are not guaranteed in the future.
Different ways to invest in gold
Many means of investing in gold are available today:
Physical gold – jewelry, coins, biscuits.
Gold ETFs – Units that are bought and sold on the exchange through demat.
Gold Mutual Funds – Indirect investment in ETFs.
Sovereign Gold Bonds (SGBs) – Bonds issued by the government that also pay interest.
Conclusion
Both physical gold and gold ETFs have given excellent returns in the last one year. While physical gold is suitable for emotional and traditional needs, gold ETFs have emerged as a convenient and safe option for modern investors. But before investing, do assess your needs, goals and risk appetite.