The outflow comes after a strong rally in domestic gold prices this year, with investors appearing to book profits following gains in the yellow metal.
Gold ETF flows had remained largely positive in recent months amid heightened investor interest in safe-haven assets.
In contrast, silver ETFs continued to attract strong investor interest. The category recorded net inflows of ₹2,133 crore in May.
The divergence in flows comes amid a surge in precious metal prices and changing investor preferences. Gold prices have remained near record levels in recent months, while silver has gained attention from investors amid expectations of both industrial and investment demand.
The latest AMFI data also comes against the backdrop of operational restrictions imposed by some fund houses on gold investment products.
Earlier this month, HDFC Mutual Fund introduced temporary limits on subscriptions to its gold ETF and gold fund of fund schemes. More recently, other asset management companies, including Nippon India Mutual Fund, Tata Mutual Fund, Axis Mutual Fund and Aditya Birla Sun Life Mutual Fund, announced restrictions on large investments into select gold ETF products.
Despite the record outflow in May, gold ETF demand has remained robust on a year-to-date basis. Industry data released earlier by the World Gold Council showed that Indian gold ETFs had attracted strong inflows during 2026 even after recording their first monthly outflow in a year.
The latest trend suggests investors may be reassessing allocations after the sharp run-up in gold prices, while continuing to increase exposure to silver through ETF routes.
