Gold ETFs to remain in favour, silver outlook stays cautious: Mirae Asset

Gold exchange-traded funds (ETFs) are likely to continue attracting strong investor inflows in the coming months, while silver is being approached more cautiously, according to Siddharth Srivastava, Head – ETF Product & Fund Manager at Mirae Asset Investment ManagersExplaining the near-term outlook for precious metal ETFs, Srivastava said, “Overall, I expect the trend to continue… people investing more in gold and silver ETFs, gold more so because we have a positive view of gold going forward. Silver, probably we are a bit more cautious.”

He added that the current surge in investor interest is not a short-term phenomenon limited to January, but a trend that has been building for over a year.
On cumulative flows, he said, “gold, we are seeing inflow of almost ₹64,000 crore in the last one year… silver, we have seen inflows of almost ₹32,000 crore in the last one year.”

Beyond long-term investing, Srivastava said trading and short-term participation have also risen sharply in the precious metals segment.Highlighting the jump in activity, he said, “average trading… was around ₹1,100 crore daily… that has shot up to almost ₹8,000 crore daily this year… some bit of it, that is return chasing.”

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However, he cautioned investors against assuming that ETF prices always reflect global trends. He said, “People have to be cautious that ultimately these ETFs will replicate and give returns which are corresponding to domestic spot and not international spot or MCX futures.”

For the entire interview, watch the accompanying video

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