Gold’s 9 pc surge drives inflows into cash, debt securities: Report

Gold prices surged over 9 per cent this month, outperforming broader equity markets, while investors shifted gains toward safer assets. Precious-metal inflows declined sharply, whereas money-market and fixed-income funds attracted substantial investments. Micro-cap stocks led equity gains, while large-cap funds saw increased inflows

New Delhi: Gold prices jumped over 9 per cent this month which is about five times the returns of broader equity markets but investors largely moved gains into safer assets rather than reinvesting in precious metals, a report said on Wednesday.

Precious metal inflows dropped from Rs 8,680 crore in June to Rs 4,084 crore in July, while Rs 1,40,390 crore flooded into money market funds against last month’s Rs 65,530 crore of outflows, the report from Vallum Capital said. The immediate trigger for gold price gains was the US jobs report that came in far weaker than expected, briefly reducing fears of another Federal Reserve interest rate hike, the report added.

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Fixed income reversed too from Rs 53,006 crore of outflows in June to Rs 5,947 crore of inflows in July — a Rs 58,954 crore swing in one month. Within India, auto and transport had exceptional months on the back of the country’s first‑ever 4‑lakh passenger vehicle in July. Technology recovered sharply as global investors rotated out of Korean semiconductor stocks directly into Indian software companies, but Rs 1,345 crore left technology funds anyway.

Healthcare absorbed Rs 737 crore in fresh money, quietly building on over 16.4 per cent for the year. According to the report, PSU banks gained over 3.8 per cent on strong quarterly results, while private banks’ shares fell -4 per cent as the flow gap between the two widened sharply.

Micro-cap emerged as the strongest performer, delivering 4.6 per cent in one month, 15.9 per cent YTD and 12.7 per cent over one year, while small-cap returned 2.8 per cent in the month, 11.4 per cent YTD and 13.3 per cent over one year. Large-cap funds, meanwhile, sit at -3.9 per cent YTD yet absorbed Rs 14,977 crore in July flows, up Rs 5,291 crore from June, the report noted.