Investors are reluctant to invest in gold ETFs as gold prices continue to rise. Rising interest rates also discourage people from investing in gold ETFs. Also, experts say the Russia-Ukraine war and the US Federal Reserve’s interest rate hikes are responsible for the fall in gold ETF investment.
Currently domestic investors prefer to invest in equity mutual funds rather than other assets. It is noteworthy that Rs.96,700 crore in 2021 and Rs.1.6 lakh crore in 2022 have been invested in equity mutual funds.
Gold ETFs are mutual fund units that trade like stocks on the stock market. Gold ETF mutual fund scheme is issued by mutual fund companies. Demat account is mandatory to invest in this. The units of this gold ETF fund are listed on the stock market. After that one can buy even one unit of this Gold ETF. One can buy these units anytime during the trading hours of the stock market; can sell The unit NAV value of Gold ETF will also change according to the change in gold price. That is, if the price of gold rises, the NAV will increase; If it decreases, the NAV will decrease.
As the price of gold continues to rise, people prefer to buy it as gold jewellery. So it is clear that they are avoiding the gold ETF scheme and have started buying it as jewellery!