Mutual funds suspend bulk subscriptions to gold ETFs ahead of festival season

SENSEX 74,729.27

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CRUDEOIL 9,580.00

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GOLD 147,915.00

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SILVER 211,170.00

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SENSEX 74,729.27

+ 413.66

NIFTY 23,146.15

+ 148.80

NIFTY 23,146.15

+ 148.80

CRUDEOIL 9,580.00

+ 295.00

CRUDEOIL 9,580.00

+ 295.00

GOLD 147,915.00

+ 426.00

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The suspension comes ahead of Dussehra and Diwali, when gold purchases are considered auspicious and investments in precious metals typically rise.

By Reuters

Updated - October 17, 2026 at 12:04 AM. | MUMBAI

Indian mutual funds have suspended bulk subscriptions to gold ETFs ahead of the festive season, while allowing investors to redeem their holdings. | Photo Credit: iStockphoto

Several large Indian mutual funds issued public notices late on Thursday suspending bulk subscriptions to gold exchange-traded funds, just ahead of the festive season when investor demand typically rises.

The notices from the fund houses, including Kotak Mahindra Mutual Fund, UTI Mutual Fund and HDFC Mutual Fund, did not cite a reason for the move. There is no restriction on redemptions from these funds.

SEBI nudge preceded suspension

The decision was taken following a nudge from the Securities and Exchange Board of India, according to a mutual fund executive familiar with the discussions. Two bullion industry officials confirmed the halt had followed discussions with the market regulator.

Rupee pressure and gold demand

The Indian rupee has been under pressure this year due to a surge in global oil prices, which have inflated the country’s import bill, and heavy selling by foreign investors in Indian equities. Strong demand for gold has further weighed on the currency, prompting the government to raise import duties on gold and silver earlier this year.

India, the world’s largest consumer of silver and second-largest consumer of gold, relies on imports to meet most of its demand, a dependence that can sometimes widen its trade deficit.

Gold imports fell to $1.8 billion in September, from $2.3 billion in August. However, Indians will celebrate Dussehra in October and Diwali in early November, when buying gold is considered auspicious.

Festival-season demand raises concerns

Inflows into gold and silver ETFs surged during last year’s festival season as investors turned to precious metals amid lackluster stock market returns.

The move is surprising, as gold and silver imports have fallen sharply over the past two months from a year earlier and have not contributed to the trade deficit, said a dealer at a private bank that supplies bullion to ETFs.

“It looks more like a precautionary measure to avoid a surge in imports in October,” the dealer said.

Published on October 16, 2026

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