Gold ETFs ride the updraft: Tax shifts flip the switch on record inflows

LTCG tax perks and bond drought create perfect storm

August saw a record influx of Rs 1,611 crore into gold exchange-traded funds (ETFs), surpassing the previous high of Rs 1,483 crore set in February 2020.

This uptick in investment signals a renewed interest in gold, driven by the reintroduction of long-term capital gains (LTCG) tax benefits and the absence of new sovereign gold bond issues.

In just two months, gold ETFs have attracted Rs 2,948 crore, matching the total investments from the previous six months.

The Union Budget announcement on July 23, which restored LTCG tax benefits for gold ETFs and gold fund of funds, has