Topic 5: BULLION: SAFETY MESH

Gold and silver extended their strong rally in November 2025, supported by heightened safe-haven demand, global uncertainty, and a powerful surge in exchange-traded fund (ETF) inflows. Geopolitical tensions, including Ukraine conflict and instability in the Middle East, along with volatility in equity markets and concerns over the US fiscal outlook, encouraged investors to increase allocations to precious metals as defensive and diversification assets. The depreciation of the Indian rupee beyond ₹89 per US dollar further strengthened domestic investment interest. Silver significantly outperformed gold during the month, supported by speculative momentum as well as expectations of stronger industrial demand from sectors such as renewable energy, electronics, and electric vehicles. Uncertainty around China’s economic recovery and persistent global trade tensions reinforced silver’s appeal as both an industrial and safe-haven asset. Meanwhile, weak crude oil prices and fragile risk sentiment globally continued to push capital toward alternative stores of value.

Monetary policy expectations also played a crucial role in driving flows. Growing optimism around potential US Federal Reserve rate cuts reduced real yields, making non-yielding assets more attractive. In India, relatively accommodative signals from the RBI supported domestic demand for precious metals, even as the contrast with a more cautious US Fed strengthened the dollar and added to rupee depreciation pressures.

The most decisive factor behind November’s momentum was the historic surge in ETF investments. Indian gold ETFs, which had already recorded a record ₹7,743 crore of inflows in October, sustained strong buying through November. Year-to-date inflows reached approximately ₹276 billion (around US$3.1 billion), the highest level ever recorded. Assets under management in gold ETFs more than doubled within six months to cross ₹1.02 lakh crore, while the number of investor folios rose sharply, reflecting growing participation from both retail and institutional investors seeking long-term portfolio protection. At a global level, gold ETF holdings climbed to around 3,932 tonnes by the end of November, marking the sixth consecutive month of net additions. More than 700 tonnes were added to global ETFs in 2025, underlining the strengthening role of gold in strategic asset allocation. Continued central-bank accumulation, including additional purchases by China, further reinforced investor confidence. Silver ETFs registered even stronger expansion. Assets under management surged nearly 245% year-on-year to approximately ₹42,537 crore, while investor folios jumped by over 466% to 25.29 lakh. Although sharp gains prompted some profit booking, sustained inflows indicated continued confidence in silver’s long-term structural demand.

Overall, November 2025 highlighted a decisive shift toward paper-based investment in precious metals, with ETFs emerging as the dominant driver of market performance and signalling a more institutional, long-term phase of the precious metals cycle.



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