What’s the story
Gold and silver exchange-traded funds (ETFs) have witnessed a major spike in early trade on Monday.
The surge is mainly due to the geopolitical tensions in West Asia, which have pushed global bullion prices higher and triggered a flight to safety.
At around 9:30am when Sensex was down by 959 points and Nifty fell by 1.15% to 24,889 points, gold and silver-linked ETFs emerged as major gainers.
Tata Silver ETF leads the charge
Tata Silver ETF led the charge with a massive 7% jump. Other ETFs such as ICICI Prudential Silver and SBI Silver also followed suit, rising over 6% each.
Nippon India Silver ETF also saw a similar spike of over 6%. On the gold front, ICICI Prudential Gold and Tata Gold ETFs gained more than 5%, while Nippon India ETF Gold and SBI Gold ETFs advanced by 4-5%.
Gold surges to record high
The surge in ETFs mirrors the firm gains in underlying bullion prices. MCX gold futures opened nearly 3.15% higher at ₹1,67,217 per 10gm (24-carat).
In international markets, spot gold rose by 1.86% to $5,345.5 per ounce in early Comex trade while silver also edged higher by 0.81% at $94.045 per ounce.
The uptick indicates renewed safe-haven demand as escalating US-Israel and Iran tensions pushed investors away from equities which traded deep in red during early deals across Asia’s equity markets.
Geopolitical tensions keep gold, silver prices elevated
Market participants expect volatility in precious metals to remain high as geopolitical developments evolve.
Historically, episodes of elevated conflict risk have supported gold and silver prices due to their status as defensive assets.
Meanwhile, the rupee weakened past the ₹91 per US dollar mark in early trade, partially offsetting the impact of rising global gold prices on domestic rates.
Analysts say that sustained gains in bullion will depend on how long geopolitical uncertainty persists and whether crude prices remain elevated.