Market regulator SEBI has introduced a major change in how physical gold and silver held in mutual fund schemes are valued.
This new system will start on April 1, 2026. The main goal is to make valuations more transparent and better aligned with the domestic market.
SEBI has also stated that the Association of Mutual Funds in India (AMFI), in consultation with SEBI, will create a uniform policy to implement this change.
This ensures that all mutual fund companies follow the new rule in a consistent way.
How Valuation Worked Before
Until now, gold and silver ETFs calculated their value based on the AM fixing price from the London Bullion Market Association (LBMA).
This international price was then converted into Indian rupees. Added costs such as transport, customs duties, taxes,
and other domestic charges were included to get the final valuation. In short, the valuation was based on an international benchmark, adjusted for India.
What Will Change in Valuation
After discussions with the Mutual Fund Advisory Committee and public feedback, SEBI has decided that mutual funds will now use the polled spot prices published by recognised stock exchanges for gold and silver derivative contracts with physical delivery.
SEBI believes that because stock exchanges follow strict regulatory rules and transparency, these exchange-published spot prices will better reflect the actual domestic market.
This change will also make valuations more uniform across different schemes and reduce discrepancies.
Impact on Investors
Investors in gold and silver ETFs or mutual fund schemes holding physical bullion will notice the impact directly. Under the new system:
The NAV (Net Asset Value) will closely follow the domestic spot price, reflecting India’s local supply and demand.
Differences in valuation between fund houses are likely to decrease, improving transparency and trust.
NAVs may experience minor short-term fluctuations because domestic spot prices can differ slightly from international prices.