India funds see first inflows in weeks as China recovery sparks record EM commodity and gold allocations

India-focused funds have broken a five-week streak of redemptions, drawing $142 million in net inflows this week as global investors rotate allocations toward Emerging Markets, according to Elara Capital's Global Liquidity Tracker. The move comes amid renewed optimism around China’s recovery, which is fuelling record demand for commodities and gold.

The rebound in India was entirely ETF-driven, with $241 million of inflows, while long-only funds continued to leak $100 million. This shift highlights investors’ preference for tactical exposure rather than long-term commitments. Regional patterns on the other hand were uneven. France-domiciled India funds reached a decade-high inflow of $144 million, but redemptions continued from Japan ($30 million), the UK ($41 million), and Luxembourg ($44 million).

The broader Emerging Market story remains dominated by commodities. EM Commodity funds attracted a record $1.14 billion, their strongest inflow since 2020. The last such surge coincided with a powerful rally in Indian metals between July 2020 and March 2022, a trend that appears to be repeating since July 2025, with Indian miners once again outperforming.

Gold shines, technology stabilises
Investors have piled into gold at an unprecedented pace. Gold funds saw $16 billion in inflows this week alone, capping the strongest four-month streak on record. Weekly allocations, averaging $3 billion recently, spiked nearly fivefold as prices broke above April 2025 highs.