SEBI's New Rule for Gold and Silver Mutual Funds

Announcements
,
1

A new SEBI rule for gold and silver mutual funds has come into effect from April 1, 2026. Under this revised framework, mutual funds must value physical gold and silver using polled spot prices published by recognised stock exchanges that are used for settlement of physically delivered gold and silver derivatives contracts. The move replaces the earlier LBMA-linked valuation approach and shifts the reference framework closer to domestic market pricing.

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What has changed?

  • Mutual funds will now use exchange-published domestic polled spot prices for valuing physical gold and silver holdings.

  • The revised rule applies from April 1, 2026.

  • This replaces the earlier valuation method that relied on international benchmark pricing with domestic adjustments.

Why this matters?

  • The new framework is intended to bring valuation closer to Indian market conditions.

  • It may improve consistency in valuation methodology across schemes holding physical bullion.

  • It also reflects a stronger domestic-market reference mechanism through exchange-based spot polling.

What investors should keep in mind?

It does not automatically mean better returns, lower volatility, or identical performance across all gold and silver fund products.

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Industry implementation

SEBI has laid down the revised valuation basis, while a more uniform industry-level application framework is expected through AMFI in consultation with SEBI. That is why it is better to avoid overclaiming on execution details unless scheme-level disclosures explicitly say so.

For investors, the real takeaway is simple: gold and silver mutual fund valuations are now being aligned more closely with domestic exchange-published spot pricing. It is an important regulatory shift for valuation consistency, but investment decisions should still be based on risk appetite, time horizon, and scheme-specific details.

2

Important Update on RBI Gold Reserves

There have been discussions around the RBI’s gold reserves and claims that gold was sold to support India’s foreign exchange reserves.

Here is the official clarification.

The Reserve Bank of India has denied the gold-sale claim and confirmed that its physical gold stock remains unchanged at 880.52 tonnes.

PIB Fact Check has also marked the claim as fake.

As per the clarification, gold’s share in India’s foreign exchange reserves increased from 13.92% at the end of September 2025 to 16.70% on March 31, 2026, and further to 16.85% as of May 22, 2026.

This means there is no official confirmation of any physical gold sale by the RBI.

For investors, the key takeaway is simple: do not react to unverified claims around gold reserves, forex reserves, or currency stability. Always rely on official updates before forming any market view.