Gold ETFs Rally; But Why Are SBI, Axis, Aditya, Tata, Nippon, HDFC Mutual Funds Imposing Restrictions?

Gold exchange-traded funds (GTF) soared sharply on June 15th, joining the bullish bandwagon in the bullion market. The reason for the surge is the peace agreement between the US and Iran that is scheduled to be signed on June 19. However, the gold ETF surge comes as major mutual fund houses are imposing restrictions on transactions. The latest to join gold ETF restrictions is the SBI Mutual Fund.

Gold ETFs Rally Today

Majority of gold ETFs soared by 2% to 3% on Monday. The top gainers were Axis Gold ETF, HDFC Gold ETF, ICICI Prudential Gold ETF, Kotak Gold ETF, Invesco India Gold ETF, IDBI Gold ETF, Nippon India ETF Gold Bees, SBI Gold ETF, Union Bank Gold ETF and UTI Gold ETF among others.

This is due to strong buying seen across safe haven assets.

Gold Rates In India:

On Monday, 24 carat gold soared by Rs 24,500 to Rs 15,15,300 per 100 grams and surged by Rs 2,450 to Rs 1,51,530 per 10 grams. In case of 22 carat, 10 grams gold is up by Rs 2,250 to Rs 1,38,900 and 100 grams gold skyrocketed by Rs 22,500 to Rs 13.89 lakh. Also, under 18 carat, 100 grams gold price climbed by Rs 18,400 to Rs 11,36,500 and 10 grams gold is higher by Rs 1,840 to Rs 1,13,650.

MCX Gold Price Today:

MCX gold price gained by 2% to hit an intraday high of Rs 1,53,829 per 10 grams. The bullion trades above Rs 1.53 lakh mark in the evening session.

However, over the past few weeks, many mutual fund houses have declared various sets of restrictions for trading in gold ETFs.

Why Mutual Funds Are Restricting Gold ETFs?

Asset management companies like SBI Mutual Fund, HDFC Mutual Fund, ICICI Prudential Mutual Fund, Nippon India Mutual Fund, Tata Mutual Fund and Axis Mutual Fund have declared new restrictions on fresh inflows in their gold ETF schemes. The restrictions very from AMC to AMC.

HDFC Mutual Fund Gold ETF Restrictions:

This HDFC Bank-backed AMC has halted direct subscriptions of Rs 25 crore or more into its gold ETF scheme with effect from June 8. Also, the AMC has announced limitations in lump-sum buying and switch-ins from HDFC Gold ETF fund-to HDFC Gold ETF fund at Rs 10 lakh per PAN per calendar month.

Nippon India Mutual Fund Gold ETF Restrictions:

The AMC has banned high net-worth investors from making new subscriptions in Nippon India ETF Gold Bees beyond Rs 25 crore. Just like HDFC, this AMC has also capped fund-to-fund switch-ins on Rs 10 lakh per month per PAN and lump-sum investments.

ICICI Prudential Mutual Fund Gold ETF:

ICICI AMC has also imposed restriction on fresh buying of more than Rs 25 crore directly into their Gold ETF schemes.

Tata Mutual Gold ETF Restrictions:

Tata Group-backed AMC announced temporary restrictions on subscription transactions for its Tata Gold Exchange Traded Fund (ETF) and Tata Gold ETF Fund of Fund (FoF). The fund house cited prevailing broader economic and market conditions as the primary reason behind this decision.

The restrictions are similar. For instance:

Tata Gold Exchange Traded Fund: Subscription transactions by large investors investing directly with Tata Mutual Fund-specifically transactions with a minimum investment amount of Rs 25 crore-will not be accepted with effect from June 8, 2026. However, this restriction will not apply to Market Makers or Authorized Participants, ensuring liquidity channels remain uninterrupted.

Tata Gold ETF Fund of Fund (FoF): Lumpsum purchases and switch-in transactions into the FoF scheme will be capped at Rs 10 lakh per PAN per calendar month (applied at the first holder level).

It said, to ensure minimal disruption to retail investors, the fund house confirmed that routine transactions such as Redemptions, Switch-outs, Systematic Investment Plans (SIP) and Systematic Withdrawal Plans (SWP) will continue to be permitted and processed in accordance with the terms outlined in the Scheme Information Document.

SBI Mutual Fund is the latest to join the capping of transactions in Gold ETFs. Axis Mutual Fund and Aditya Birla Sun Life Mutual Fund have also announced similar restrictions.