Mumbai: With the government's latest measures expected to take the sheen off physical gold, investors today flocked to buy gold ETFs and sovereign gold bonds on stock exchanges.
The gold exchange traded funds gained as much as three per cent in early trading on the BSE, with HDFC Mutual Fund - HDFC Gold Exchange Traded Fund jumping to Rs 2,900 per gram. Sovereign gold bonds were also trading higher with gains up to 4 per cent in early trade.
While gold was trading higher, gold futures were marginally lower at MCX.
Apart from the government's move to demonetise Rs 1,000 and Rs 500 notes to fight black money, the initial trends of the American elections that indicate a possible win for Republican candidate Donald Trump seemed to have a bearing on investor sentiments.
Starting off on a weak note, key 30-share Sensex witnessed significant volatility and shed over 820 points or nearly 3 per cent to 26,770.69 points in early trading hours.
Trading in Gold ETFs has been tepid in the last three financial years.
In September, investors pulled out Rs 77 crore from Gold ETFs taking the total withdrawal to Rs 539 crore in the first six months of the current fiscal.
The assets base of gold-linked ETFs account dropped to Rs 6,295 crore at the end of September from Rs 6,349 crore in August-end.
Mutual fund sector has 14 gold-based schemes, which have been in the market since 2006-07.
Published Date: Nov 09, 2016 11:11 am | Updated Date: Nov 09, 2016 11:11 am