Gold exchange-traded funds (ETFs) have delivered stellar gains so far in 2025, benefiting from a powerful rally in gold prices. The asset class has witnessed strong investor inflows, making gold ETFs one of the most popular investment avenues this year for those seeking stability and hedge against uncertainty.
Gold Prices Hit Record Highs
Domestic gold prices have surged over 40 percent in 2025, supported by strong global factors. According to Sandip Raichura, CEO – Retail Broking & Distribution and Director at PL Capital, “Gold has had a blockbuster year, with domestic prices up more than 40% in 2025. The surge has been driven by heavy central bank buying, strong inflows into exchange-traded funds (ETFs), expectations of multiple US Federal Reserve rate cuts, and persistent geopolitical tensions linked to tariffs. These factors have made gold the safe-haven of choice, though fresh allocations at record levels now carry the risk of volatility.”
On the Multi Commodity Exchange (MCX), gold climbed 5 percent in August alone, touching a monthly high of ₹1,01,967 per 10 grams. A weaker US dollar, political pressure on the Federal Reserve, and heightened geopolitical tensions have further reinforced gold’s status as a preferred hedge.
Surge in Gold ETF Inflows
Investor interest has been robust, with gold ETFs recording inflows of ₹2,190 crore in August, the highest since January’s ₹3,751 crore. After outflows in March and April, gold funds have staged a strong comeback as investors sought defensive allocations amid global uncertainty.
Cumulative investments in gold ETFs have crossed ₹5,648 crore year-to-date in 2025. Assets under management (AUM) of gold ETFs surged nearly 94 percent year-on-year, rising from ₹37,390 crore in August 2024 to ₹72,496 crore in August 2025.
Top-Performing Gold ETFs in 2025
Here’s how four leading gold ETFs have performed over the past year and longer periods:
HDFC Gold ETF – This fund delivered 38.01 percent returns in the past one year with a NAV of ₹86.48. Over the last 5 years, it has given 14.98 percent annualised returns, and over the last decade, it has compounded at 12.69 percent annually.
Axis Gold ETF – Posted 38.05 percent returns over the last year, with a NAV of ₹84.35. Its 5-year annualised return stands at 14.15 percent, and 10-year return at 12.44 percent.
ICICI Prudential Gold ETF – Delivered 38.06 percent one-year return with a NAV of ₹86.59. Over 5 years, it has returned 14 percent annually and 12.59 percent annually over 10 years.
UTI Gold ETF – Topped the list with 38.73 percent returns over the last year. Its NAV is ₹86.59, while 5-year and 10-year annualised returns stand at 14 percent and 12.72 percent, respectively.
Outlook for Investors
Axis Mutual Fund said in its note that global demand for gold remains well supported, with central banks diversifying reserves and ETFs attracting consistent inflows. Investors have also been adding to holdings of bars and coins, although jewellery demand has moderated in price-sensitive markets.
For investors, gold ETFs offer an efficient way to take exposure to gold prices without dealing with storage or making charges. However, with gold trading near record highs, fresh allocations should be done gradually to manage volatility risks.
Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before making any investment decisions.
