Demand for gold ETF may double this year: WGC
18 May 2012 1:12 AM GMT
Investments in gold via Exchange Traded Funds (ETF) are likely to double this year from 15 tonnes in 2011 on the back of robust demand, World Gold Council (WGC) said on Thursday.
While the US is the biggest ETF market is the world, Indian gold ETF market is ‘considered the largest in Asia’ according to WGC.
‘The investment demand for gold under Exchange Traded Funds continues to be very very strong. In future, the total tonnes of gold investments made under ETF (in India) may double,’ WGC managing director India and Middle Eastern region Ajay Mitra said. The gold ETF market in India in 2007 was just five tonnes and rose to 15 tonnes in 2011. It ‘may double this year,’ he added.
Gold ETFs, commonly referred as ‘paper gold’, are mutual fund units issued by asset management companies against 99.5 per cent purity physical gold deposits. Quoting AUM (asset under management) figures, Mitra said gold investment demand which was Rs 3,581 crore in January 2011 soared to Rs 4,800 crore in April 2011. This year, it stood at Rs 9,614 crore in January and rose to up to Rs 10,218 crore in April 2012.
‘There is a robustness in investment demand. People largely prefer investing in ETFs, given its convenience,’ Mitra said.
India’s total gold demand in 2011 was 963 tonnes, he said, adding that one of the major factors of people investing in gold ETFs is low inventory costs.
While the US is the biggest ETF market is the world, Indian gold ETF market is ‘considered the largest in Asia’ according to WGC.
‘The investment demand for gold under Exchange Traded Funds continues to be very very strong. In future, the total tonnes of gold investments made under ETF (in India) may double,’ WGC managing director India and Middle Eastern region Ajay Mitra said. The gold ETF market in India in 2007 was just five tonnes and rose to 15 tonnes in 2011. It ‘may double this year,’ he added.
Gold ETFs, commonly referred as ‘paper gold’, are mutual fund units issued by asset management companies against 99.5 per cent purity physical gold deposits. Quoting AUM (asset under management) figures, Mitra said gold investment demand which was Rs 3,581 crore in January 2011 soared to Rs 4,800 crore in April 2011. This year, it stood at Rs 9,614 crore in January and rose to up to Rs 10,218 crore in April 2012.
‘There is a robustness in investment demand. People largely prefer investing in ETFs, given its convenience,’ Mitra said.
India’s total gold demand in 2011 was 963 tonnes, he said, adding that one of the major factors of people investing in gold ETFs is low inventory costs.
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