Why More Indians Are Investing in Gold ETFs in 2026?

Have you ever thought of buying gold without actually holding it? That’s exactly what many Indians are doing now.

In 2025, a massive shift is visible. More Indians, especially the younger lot, are choosing Gold ETFs instead of physical gold. In 

January 2025 alone, investments in gold ETFs hit nearly ₹3,751 crore. That speaks volumes. 

But why? Let’s break it all down.

The Shift: From Lockers to Online Platforms

People no longer want to buy gold and hide it in lockers. Digital India has opened easier, safer doors. With mobile apps and demat accounts, investing in gold is now just a few taps away.

Gold ETFs (Exchange Traded Funds) are becoming a smarter choice. They are traded like shares. So, no need to worry about purity or storage. Young investors from cities like Bengaluru, Pune, and Ahmedabad are driving this trend. They value transparency, and they want liquidity.

Here's why:

Earlier, gold meant weddings and festivals. Now, it’s part of the investment portfolio.

Rising Gold Prices Are Changing Behaviour

In 2025, gold crossed ₹93,000 per 10 grams. That’s an all-time high. As equity markets showed flat returns, gold started looking even better.

Investors were looking for safety. With global inflation and slow growth, gold became the safe option. Even mutual funds with gold 

ETFs performed better than equity funds.

Here is a simple Indian comparison:

That difference is too big to ignore. Even conservative investors who usually go for FDs or gold coins are now picking ETFs.

Safe, Simple, Smart: Why Middle-Class Indians Are Interested?

Gold ETFs don’t need safes. They don’t get stolen. They can be sold anytime. And most importantly, they are regulated. SEBI makes sure these are not scams.

Suresh, a 42-year-old from Jaipur, wanted to buy gold for his daughter’s marriage. He put ₹5,00,000 in a gold ETF in 2022. In 2025, it’s worth nearly ₹5,95,000. He’s happy. No bank locker charges, no insurance worries.

Middle-class families now prefer liquid assets. Gold ETF is ticking all the boxes.

Top Gold ETFs Giving Strong Returns

Not all ETFs are the same. Some funds are giving better returns, better tracking accuracy, and better liquidity. Here are some names that Indians are trusting in 2025:

Investors look at things like fund manager reputation, tracking error, and AUM before choosing. Most platforms now compare all of this in simple dashboards.

How Indians Are Using SIP in Gold ETFs?

Systematic Investment Plans (SIPs) are no longer just for equity funds. Many Indians now do gold ETF SIPs.

Anil started with just ₹2,000 monthly in 2021. By 2025, he has invested ₹96,000. His value is now ₹1,15,000. That’s the power of compounding plus gold’s rise.

SIP in gold ETFs suits salaried people. You don’t need a lump sum. And you get units even when gold prices dip.

Festivals & Emotions: Modern Indians Go Digital

Akshaya Tritiya, Diwali, and Dhanteras are still gold festivals. But now, people are buying digital gold or ETFs instead of bangles. In April 2025, trading volumes in gold ETFs tripled.

Nippon India ETF Gold BeES alone saw trades of over ₹172 crore. That’s 52% of total volumes during Akshaya Tritiya week. Digital gold gifting is also catching up. New-age couples gift gold ETF units instead of rings.

Tax Rules Are Also Helping Investors

Gold ETFs fall under non-equity mutual funds for taxation. After 3 years, gains are taxed with indexation benefits. That reduces taxes.

Let’s say you invest ₹1,00,000 in 2021. You redeem in 2025. Indexed cost becomes ₹1,17,000. So, if your value is ₹1,25,000, then taxable gain is only ₹8,000. Tax is 20% of that = ₹1,600. That’s better than paying 30% on fixed deposit interest.

Tips Before You Start

Before exploring gold ETFs, take a few steps to stay clear of mistakes.

• Check tracking error – This tells you how closely the ETF mirrors actual gold prices. A low tracking error means better accuracy. If you ignore this, you might earn less even if gold prices go up.
  
  
• Look for high daily traded volume – This helps in buying or selling your units easily. A fund that barely trades can keep your money stuck. Go with liquid ETFs.
  
  
• Start a SIP if you’re new – SIPs make it easier to handle market ups and downs. You won’t stress about timing the market. Over time, you average out your cost.
  
  
• Always compare 1-year and 3-year returns – It shows consistency. One-year gains could be lucky. Three-year returns show how the fund performs over time.

Could you not treat it like an emotional buy? Treat it like an investment. These simple steps help you stay in control. A bit of checking now can save years of regret.

Final Thoughts

India’s investment habits are changing. Gold ETFs are no longer niche. With easy access, zero storage risk, and smart taxation, they are taking centre stage. 

If it’s your daughter’s future, a house down payment, or just wealth building, Gold ETFs make sense in 2025.

Keep it simple. Keep it digital. And let your money stay golden.

FAQs 

1. Can I gift Gold ETFs to someone in India? 

Yes, through most platforms, you can gift ETF units directly to another demat account.

2. Are Gold ETFs better than Sovereign Gold Bonds (SGBs)? 

SGBs offer interest, but have 8-year lock-in. ETFs are liquid. Choose based on your time horizon.

3. Can I pledge Gold ETFs to get a loan? 

Yes, many banks and NBFCs accept gold ETFs as collateral for loans.

4. What happens to my Gold ETF if I die? 

Nominees will get the units. Keep your nomination updated in your demat account.