After investing heavily in gold for 12 consecutive months, the attitude of investors seems to be changing a bit. The latest figures for May 2026 have surprised the market a bit. According to the report of Association of Mutual Funds in India (AMFI), a net withdrawal of Rs 725 crore has been recorded from Gold ETF in the month of May. This is the first time in the last one year that investors have withdrawn such a huge amount from gold. Just before this, in April, investors had made a bumper investment of Rs 3,040 crore. This big change within a month has raised a question in the minds of investors whether the gold rally has really stopped now.
There is no panic behind this selling in the market, but a well-thought-out strategy. According to Amfi Chief Executive Venkat Chalasani, there has been a tremendous rise in gold prices in recent times. After the increase in import duty, gold prices went up rapidly. In such a situation, people investing at lower levels thought it better to cut their profits (profit booking) after seeing the right time. Apart from this, global market conditions are also having an impact. The strengthening US dollar and speculation about changes in interest rates by the US Federal Reserve have alerted investors, due to which they thought it appropriate to withdraw some money and secure it.
The world of investing often presents shocking figures. Despite huge withdrawal of Rs 725 crore in May, the total asset under management (AUM) of gold ETFs increased instead of decreasing. By the end of May, its AUM increased by 4 percent to about Rs 1.85 lakh crore. If we look at it on an annual basis, this figure has almost tripled. The direct reason for this is the huge rise in gold prices. Even though investors withdrew some money, the value of the money left in the fund increased so rapidly as per the market price that the overall size of the fund became larger.
On one hand, money is being withdrawn from the yellow metal, on the other hand, the shine of the white metal is attracting investors. Unlike gold ETFs, investors have openly placed bets in silver ETFs. There was a strong investment of Rs 2,133 crore in silver funds during May. Market experts say that in future, due to solar energy and rapidly increasing electrification, the demand for silver in the industrial sector may skyrocket. For this reason, investors are making silver a part of their portfolio keeping a long term perspective.
If your portfolio also includes Gold ETF, then you should not be hasty in taking decisions after seeing this withdrawal in May. Market experts clearly believe that this is just a routine profit booking, investors have not become disillusioned with gold at all. From the beginning of the year 2026 till now, the figures of total investment in Gold ETFs have been quite strong. This simply means that whenever the market moves sideways, taking profits in between is a part of a good investment strategy. The market's confidence in gold as a safe long-term investment is still intact.
Disclaimer: This article is for information only and should not be considered as investment advice in any way. TV9 Bharatvarsh advises its readers and viewers to consult their financial advisors before taking any money-related decisions.
