Gold ETFs shine again as higher import duties trigger fresh investor interest
After remaining largely range-bound for more than three months, Gold Exchange Traded Funds (ETFs) have staged a sharp comeback, driven by rising gold import duties and renewed investor appetite for safer assets amid market uncertainty.
The latest rally in Gold ETFs highlights how policy decisions and global economic trends continue to influence investor behaviour in India, where gold has traditionally remained one of the most trusted stores of value.
Gold ETFs, which function like mutual funds but closely track domestic gold prices, witnessed strong gains on May 13, 2026, with several funds rising by nearly 7 percent in a single trading session. Among the top performers was Mirae Asset Gold ETF, which surged more than 8 percent to around Rs 146 per unit, making it one of the most expensive gold ETFs currently trading in the market. Another major gainer was the Choice International Gold ETF, which climbed nearly 6 percent to Rs 149.5 per unit.
The sudden surge comes after months of relatively subdued movement in gold-related investment instruments. Following a spectacular rally of over 60 percent during calendar year 2025, many market analysts had projected that gold prices had peaked and could enter a consolidation phase. As a result, gold ETFs and other bullion-linked assets remained relatively calm during the first quarter of 2026.
However, the recent increase in import duties on gold appears to have reignited momentum in the sector. The higher duties were introduced by the government as part of broader efforts to discourage excessive gold imports and reduce pressure on India’s foreign exchange reserves.
Prime Minister Narendra Modi had earlier urged citizens to moderate gold purchases in order to help contain foreign exchange outflows, as India remains one of the world’s largest importers of gold.
Ironically, while higher import duties were intended to curb physical gold demand, they have simultaneously increased the attractiveness of gold-linked financial products such as ETFs. Investors now appear to be shifting towards paper gold investments, which offer exposure to rising gold prices without the challenges associated with storing physical gold.
Market experts believe the renewed rally may not be short-lived.
Analysts point to several long-term global factors supporting precious metals, including central bank gold buying, fears of currency debasement, geopolitical uncertainty and the broader trend of de-dollarisation in international trade.
“Our structural view on gold and silver remains constructive. The global de-dollarisation theme, central bank buying and currency-debasement hedging are all multi-year drivers that operate independently of any domestic tax decision,” analysts said.
Some projections have turned increasingly bullish, with estimates suggesting international gold prices could move towards $6,000 per ounce over the next 12 to 18 months. Silver, too, is expected to benefit from the broader precious metals rally.
The rebound in Gold ETFs also reflects changing investment patterns among retail investors. With equity markets witnessing phases of volatility and uncertainty over global growth, many investors are once again turning to gold as a defensive asset class capable of preserving wealth during periods of instability.
Financial planners, however, caution that while gold remains an important portfolio diversifier, investors should avoid excessive concentration in any single asset class. They advise balanced exposure through systematic investment strategies rather than speculative short-term buying driven purely by market momentum.
For now, though, the shine appears to have returned to gold ETFs, reaffirming the yellow metal’s enduring appeal in uncertain economic times.
