Gold ETFs vs Silver ETFs vs Stocks: Has Love For Precious Metals Become Nightmare For Sensex, Nifty?

The latest AMFI data of mutual funds has showcased a new reality, one which could be worrisome for equity market. In January 2026, the combined asset under management of gold and silver exchange traded funds (ETFs) crossed Rs 3 lakh, a new all-time high. This has tripled in size in just 6 months. Gold and silver ETFs which are seen as an attractive bet against physical gold and silver, is now more appealing than equity market itself which has been underperforming.

Gold ETFs vs Silver ETFs vs Equity:

Data from AMFI showed that gold ETFs recorded an inflow of Rs 24,039.96 crore in January 2026, while silver ETFs posted an inflow of Rs 9,463 crore. Together, the duo recorded an inflow of Rs 33,502.96 crore. This is 39.4% higher from the inflow of Rs 24,028.59 crore attracted by equity-oriented schemes.

"Gold and multi‑asset categories continued to attract strong investor interest, with gold ETFs posting record inflows of Rs 24,040 crore in January 2026, driven by the superior one‑year performance of gold and silver relative to other major asset classes. Their sustained outperformance has supported steady AUM expansion, reinforcing these segments as preferred diversification avenues amid volatile market conditions," Umesh Sharma, CIO Debt, The Wealth Company Mutual fund.

Investors appetite in gold and silver has been increasing rapidly over the past few months. For instance, gold and silver ETFs rose from inflow of Rs 15,609 crore in December 2025, but equity saw a decline from inflow of Rs 28,055 crore last month.

January 2026 becomes the second consecutive month of moderation in equity MFs flow.

Is growing demand for precious metals worrisome for equity market?

According to Dr. VK Vijayakumar, Chief Investment Strategist, Geojit Investments Limited, an unhealthy trend in the market now is the inflows into gold and silver ETFs exceeding the inflows into active equity funds. This is the time to put more money into equity than to precious metals which have turned highly volatile rather than a safe haven.

Gold Rates In India:

24 carat gold rates dropped by Rs 270 to Rs 1,58,510 per 10 grams on February 11, while 22 carat and 18 carat gold prices also fell by Rs 250 and Rs 200 to Rs 1,45,300 and Rs 1,18,890 respectively. At the latest price, gold is down by 1.3% in February 2026 so far, which is a recovery from 3.5% decline in the first week of February. Last month, gold prices surged by nearly 19%.

Silver Rates In India:

Silver rates are unchanged on February 11 in India to Rs 2.90 lakh mark. So far in February 11, silver prices have dropped by over 17%. This is after gaining by 47% in Janaury month where it touched its new all-time high of Rs 4,10,000 per 1Kg on January 29.

Both gold and silver rates are volatile since January 29.

Sensex, Nifty:

Sensex and Nifty are under pressure currently and trading above 84,100 and 25,900 levels. Year-to-date, Sensex has underperformed with decline of 1.23% and Nifty 50 is down by 1%.

As per Saugata Chatterjee, President & Chief Business Officer, Nippon India Mutual Fund, passive and ETF-based products also saw meaningful participation. Gold ETFs posted net inflows of Rs 24,040 crore, alongside Rs 15,033 crore into index funds and other ETFs. This suggests investors are keeping gold as part of portfolios-both as a long-term allocation and as a hedge-while steadily increasing the use of transparent, market-linked products.

While domestic and global cues can keep markets volatile in the near term, Chatterjee added, "we remain positive on India's long-term growth prospects and the continued financialisation of household savings. For retail investors, the right approach is to stay diversified, match products to time horizon, and continue systematic investing rather than reacting to short-term market noise."

Disclaimer: The views and recommendations expressed are solely those of the individual analysts or entities and do not reflect the views of Goodreturns.in or Greynium Information Technologies Private Limited (together referred as "we"). We do not guarantee, endorse or take responsibility for the accuracy, completeness or reliability of any content, nor do we provide any investment advice or solicit the purchase or sale of securities. All information is provided for informational and educational purposes only and should be independently verified from licensed financial advisors before making any investment decisions.