A rally in gold prices since Monday in the international markets in tandem with stock markets tumbling has had a positive impact on gold exchange traded funds (ETFs).
Spot gold prices were ruling at around $1,077.80 an ounce on Wednesday in Singapore, after reaching a four-week high of $1,088.30 on Monday.
In India too, gold prices gained Rs 225 per 10 gram to close at Rs 25,840 on Tuesday, after increasing by Rs 195 on Monday.
HDFC Gold ETF, Goldman Sachs ETF, IDBI Gold ETF, Reliance Gold ETF, Axis Mutual Fund Gold ETF and Kotak Gold ETF were all trading in the green on Wesdnesday with gains ranging from 0.18% to 0.68%, after having suffered losses consistently last year, when gold prices dropped about 6.30%.
Gold closed at Rs 25,390 on 31 December, 2015.
However, over a 365-day period, the returns on gold ETFs are negative, ranging from 5% to over 90%, the worst performer being Kotak Gold ETF, falling by 90.68% in one year.
The turmoil in West Asia, coupled with the unprecedented 7% crash on Chinese stock exchanges has triggered a fall across global stock markets, including India since Monday.
The West Asian crisis is due to the execution of a Iranian Shiite cleric by Saudi Arabia recently.
Indian stock markets were trading with losses just before closing, with the Sensex down 0.64% and Nifty trading with losses of 0.52%. Sensex losers included Wipro, Tata Motors, L&T, Infosys, Sun Pharma and Axis Bank, while Reliance Industries, Cipla and TCS were trading with minor gains.
Silver too had gained since Monday and closed at Rs 33,700 per kg on Tuesday.
Gold is often seen as a safe haven when stock markets fall and as an alternative investment during times of geopolitical and financial uncertainty, reported Reuters.