Geopolitical tensions lift gold as India ETF inflows hit record

Investors moved into safe havens as tensions in the Middle East escalated, lifting gold demand and driving a record 23.8 billion rupees in inflows to India’s gold exchange-traded funds. On the latest reading, those inflows topped equity mutual fund intake for the first time, market data showed on Feb. 26. Spot gold was little changed on the day but up about 4.4% over the past week.

The shift reflects rising geopolitical risk around Iran, concern over potential supply disruptions, and policy uncertainty that have supported bullion in recent sessions, even as daily price moves remain choppy.

In India, the world’s second-largest gold consumer, gold ETF inflows have surged to 23.8 billion rupees, outpacing new money into stock funds for the first time. Demand for gold ETFs in the country has climbed more than 900% since July, while equity mutual fund inflows have fallen by roughly 170 billion rupees over the same period, according to market figures.

On the geopolitical front, traders tracked fresh supply signals from Iran. Shipping data showed crude exports from Kharg Island reached about 20.1 million barrels between Feb. 15 and Feb. 20, roughly triple January’s level. Analysts viewed the ramp-up as a preemptive release and a hedge against possible disruption if tensions with the United States escalate, reinforcing defensive positioning in gold.

Crypto markets have been sensitive to the same forces. Bitcoin has been range-bound between $60,000 and $70,000, with limited large-holder accumulation and a stretch of outflows from spot Bitcoin ETFs. There were signs of stabilization midweek: U.S.-listed spot Bitcoin funds took in more than $500 million on Feb. 25 as Bitcoin moved back above $68,000, putting the group on track for a first weekly net inflow after five straight weeks that saw a combined $3.8 billion in redemptions. On-chain gauges indicate roughly 9.2 million BTC are held at a loss, and the 90-day realized profit-to-loss ratio remains below 1, pointing to more selling at a loss than profit-taking.

Market participants are monitoring developments in the Middle East, energy supply signals, and U.S. policy rhetoric for further cues. Strategists note that while gold tends to benefit from safe-haven demand, the path of the U.S. dollar and inflation expectations will help shape price direction in the weeks ahead.