The Securities and Exchange Board of India (Sebi) has changed how mutual funds value physical gold and silver, directing them to move from global benchmark pricing to domestic spot prices.
In a circular issued on Thursday, the market regulator said mutual funds will now value physical gold and silver held by schemes using polled spot prices published by stock exchanges. These prices are the same benchmarks used for settlement of physically delivered gold and silver derivatives contracts on exchanges.
Market clarity
Currently, gold and silver exchange-traded funds (ETFs) value their physical holdings based on the London Bullion Market Association’s (LBMA) AM (morning) fixing prices. The final valuation is calculated by adjusting the LBMA price for metric and currency conversions, adding transportation costs, customs duty, applicable taxes and levies, and incorporating any notional premium or discount to arrive at the domestic price.
“This will bring uniformity and transparency of price that will be used for valuation of the underlying commodity by the fund,” said Jimmy Patel, managing director at Quantum Mutual Fund.
The new framework replaces that model with exchange-published spot prices discovered within India’s regulated trading ecosystem. According to Sebi, stock exchanges operate under transparency and compliance requirements within the regulatory framework, and using their polled spot prices will make valuations more reflective of domestic market conditions while ensuring uniformity in practice across fund houses.
The new norms will come into effect from 1 April, 2026.
“Mutual funds were using different rates, there were minute differences in valuations. Now, this has been ironed out as the markets have evolved. Moving forward, mutual funds don’t have to derive the price of gold and silver,” said Anil Ghelani, head of passive investments & products at DSP Mutual Fund.
Gold and Silver ETFs have become an investor favourite in the recent past due to a rally in the commodities. Inflows into gold ETFs, for the first time, exceeded investments flowing into equity mutual funds in January. Net inflows into gold ETFs surged month-on-month to ₹24,039 crore, surpassing the ₹24,028 crore that equity funds attracted during the same period, according to data released by the Association of Mutual Funds in India (Amfi). Meanwhile, silver ETFs inflows more than doubled to ₹9,463 crore in January compared to December 2025.
