Gold-backed exchange-traded funds in Iran’s capital market continued to dominate investor attention on Tuesday’s trading session, recording a second consecutive day of record-breaking inflows of real money.
The surge reflects a broader shift in investor behavior toward inflation-hedging assets amid rising exchange rate volatility and heightened economic uncertainty.
Total trading value of these funds reached around 27 trillion tomans (approximately $163.6 million), while net inflows of real capital exceeded 5 trillion tomans (about $30.3 million) in a single day. Over the past three trading sessions, cumulative inflows into gold funds have reached nearly 10 trillion tomans (around $60.6 million), highlighting a rapid reallocation of household and retail liquidity.
Market analysts say this trend signals a clear shift in investor priorities—from liquidity preservation toward value preservation. In an environment shaped by rising inflation expectations and a weakening currency outlook, gold-linked instruments have regained their traditional role as a safe-haven asset.
The recent surge follows a turbulent period for gold funds. At the onset of military tensions earlier this year, trading in these instruments was suspended for nearly two weeks, increasing uncertainty among investors. After reopening, the dominant trend shifted toward capital outflows as investors sought liquidity or moved into fixed-income instruments with more predictable returns.
This defensive behavior persisted until early April, when rising foreign exchange rates began to reshape market sentiment. The upward movement in the US dollar in the parallel market renewed demand for inflation-protected assets, triggering a reversal in capital flows back into gold funds.
What stands out in the current phase is not only the scale of inflows but also the nature of investor behavior. Market data suggests that a significant portion of recent inflows is driven by medium-term investors rather than short-term speculators. This indicates that demand is increasingly rooted in inflation expectations rather than temporary price movements.
The expansion in daily trading volumes also reflects the growing depth and maturity of gold-backed funds within Iran’s financial market. These instruments are increasingly functioning as a key channel for absorbing retail liquidity, especially at times when confidence in other asset classes weakens.
However, analysts caution that the sustainability of this trend depends heavily on macroeconomic conditions. Continued currency volatility, persistent inflation pressures and unresolved political uncertainties could further strengthen inflows into gold funds. Conversely, any stabilization in inflation expectations or improvement in macroeconomic visibility could quickly reverse current capital flows.
Alongside gold funds, silver-based instruments have also attracted significant attention. Silver funds recorded strong demand in Tuesday’s session, with trading value reaching 1.624 trillion tomans (around $9.9 million) and net real-money inflows of 240 billion tomans (about $1.5 million). These funds have consistently attracted capital throughout the year, reflecting growing investor appetite for precious metal exposure.
Since the beginning of the year, silver funds have recorded cumulative inflows of 3.246 trillion tomans (approximately $19.7 million), underscoring the sustained nature of demand for hard-asset investment vehicles.
In contrast, fixed-income funds experienced heavy outflows, signaling a clear shift in risk appetite. On Tuesday alone, net withdrawals from these low-risk instruments reached 7.831 trillion tomans (around $47.5 million), bringing total outflows over the past two days to more than 11 trillion tomans (about $66.7 million).
Traditionally considered a safe haven for conservative investors, fixed-income funds are now losing attractiveness as real returns decline under mounting inflation expectations. Investors are increasingly reallocating capital toward assets perceived to offer better protection against currency depreciation.
Market observers say this divergence between fixed-income and gold-linked funds reflects a broader structural shift in portfolio behavior. Instead of prioritizing nominal yield, investors are now focusing on real value preservation, a trend typically associated with periods of high inflation and macroeconomic uncertainty.
