The SEBI has introduced a significant change in the valuation methodology for Gold and Silver exchange-traded funds (ETFs). Effective April 1, 2026, mutual funds will value physical gold and silver holdings using domestic spot prices published by recognised stock exchanges, replacing the current reliance on overseas benchmarks such as the London Bullion Market Association (LBMA).
The move aims to align ETF valuations more closely with domestic market conditions and ensure greater transparency and uniformity in pricing practices.
At present, Gold and Silver ETFs value physical holdings based on LBMA AM fixing prices. These prices are then adjusted for currency conversion, transportation costs, customs duties, taxes, and notional premiums or discounts to arrive at domestic valuations.
Under the new framework, ETFs will use polled spot prices published by recognised Indian stock exchanges that are used for settling physically delivered gold and silver derivatives contracts. SEBI stated that the spot polling mechanism will follow regulatory guidelines, with the Association of Mutual Funds in India (AMFI), in consultation with SEBI, prescribing a uniform valuation policy.
By shifting to exchange-published domestic prices, the regulator seeks to ensure valuations reflect real-time Indian market dynamics rather than international benchmarks.
The change is expected to reduce discrepancies between ETF prices and domestic physical metal prices. Currently, differences arise due to overseas pricing references, currency fluctuations, and asset management company-applied premiums or discounts, leading to tracking errors.
SEBI noted that recognised stock exchanges operate under stringent transparency and compliance norms, which should enhance investor confidence and standardise valuation practices across funds.
The regulatory update comes amid robust investor interest. Silver ETFs have delivered annual returns of around 168–171%, while Gold ETFs have generated gains of up to 82% over the past year.
According to latest AMFI data, Gold ETFs recorded inflows of ₹24,039 crore in January 2026. Silver ETFs saw net inflows of ₹9,463 crore, highlighting rising investor preference for passive precious metal products.
SEBI’s decision marks a structural shift in how precious metal ETFs are valued in India. By anchoring valuations to domestic spot prices, the regulator aims to enhance transparency, reduce pricing gaps, and strengthen investor protection in a rapidly growing ETF segment.
Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. This does not constitute a personal recommendation/investment advice. It does not aim to influence any individual or entity to make investment decisions. Recipients should conduct their own research and assessments to form an independent opinion about investment decisions.
Published on: Mar 2, 2026, 2:39 PM IST
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