Gold and silver ETFs witness all-time high net inflows in June 2025 as investors diversify amid global uncertainty.

Investor interest in precious metals has surged, with gold and silver exchange-traded funds (ETFs) recording their highest-ever inflows in June 2025. According to data from the Association of Mutual Funds in India (AMFI), net investments into these ETFs touched a record ₹4,085 crore — with gold ETFs attracting ₹2,081 crore and silver ETFs close behind at ₹2,005 crore.

In parallel, equity mutual funds also witnessed strong momentum, with inflows rising 24 percent from the previous month to ₹23,587 crore.

Precious Metals Gain Prominence in Asset Allocation

Amid a backdrop of macroeconomic uncertainty, investors are increasingly using gold and silver ETFs to diversify portfolios and mitigate risks from global volatility.

“Investors are increasingly looking to hedge their portfolios with gold and silver amid concerns over global growth, geopolitical risks, and interest rate volatility,” said Nehal Meshram, Senior Analyst at Morningstar Investment Research India.

With a weaker US dollar, persistent inflation, and uncertainty around central bank policy decisions, non-yielding assets like gold and silver have regained investor appeal.

Gold vs Silver: Performance Trends Over the Past Year

Over the last 12 months:

• Gold has rallied approximately 40 percent in dollar terms

• Silver has gained nearly 19 percent, driven by increasing industrial demand

“Gold ETF inflows saw a seven-fold jump, primarily due to heightened investor demand and the absence of Sovereign Gold Bond issuances in the past year,” noted Feroze Azeez, Deputy CEO at Anand Rathi Wealth.

Silver, while still behind gold in asset size, is gaining traction due to its dual investment and industrial demand characteristics. Sectors like clean energy, electric vehicles, and AI-driven electronics are significantly contributing to silver’s long-term outlook.

“Silver is no longer seen just as a precious metal. Its industrial applications are a major driver of both demand and price appreciation,” said Trivesh D, COO at Tradejini.

Why Experts Recommend a Blended Allocation

Though gold continues to be a core asset for stability, silver brings in potential for cyclical growth tied to industrial production and innovation.

“Gold offers stability and proven defensive characteristics, while silver provides cyclical upside linked to industrial growth. A blended approach allows investors to harness the strengths of both,” explained Suranjana Borthakur, Head of Distribution and Strategic Alliances at Mirae Asset Investment Managers (India).

Geopolitical concerns, such as the recent 10 percent tariff threat by US President Donald Trump on BRICS nations, are adding further upside to gold, as India remains a founding member of the bloc. At the same time, silver’s industrial exposure keeps it aligned with sectors driving future growth.

Key Takeaways for Investors

• Gold remains a reliable hedge during volatile times, suitable for risk-averse portfolios

• Silver provides upside potential, especially from industrial and technology-led sectors

• A balanced exposure to both gold and silver can improve risk-adjusted returns

With global markets continuing to experience fluctuations and uncertainty, experts believe that precious metal ETFs will continue to attract investor interest, offering a vital diversification tool beyond traditional equity and fixed income options.

Source: Moneycontrol