Gold, Silver ETFs Gain Up To 4% As Bullion Prices Climb After U.S.-Iran Deal

Gold and silver exchange-traded funds (ETFs) witnessed strong buying interest on Monday, tracking a rally in bullion prices after the United States and Iran announced an agreement aimed at ending hostilities and reopening the Strait of Hormuz.

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Silver-focused ETFs led the gains. Tata Silver ETF and Kotak Silver ETF rose nearly 4%, while Nippon India Silver ETF gained 3.7%. HDFC Silver ETF advanced 3.68%, and DSP Silver ETF added 3.9%.
Other silver funds, including Bandhan Silver ETF, Edelweiss Silver ETF, Axis Silver ETF and UTI Silver ETF, also traded higher, posting gains of up to 4%.

Gold ETFs moved in tandem with the rise in gold prices. Tata Gold ETF gained around 2%, while Nippon India ETF Gold BeES climbed 1.75%. ICICI Prudential Gold ETF rose 1.82%, and SBI Gold ETF added 1.7%.

Gold Futures Recover Sharply

The gains in ETF units followed a rebound in gold futures on the Multi Commodity Exchange (MCX). Gold contracts for August delivery rose ₹2,242, or 1.49%, to ₹1,52,770 per 10 grams. Trading volume stood at 8,948 lots during the session.

The recovery came after gold futures had declined ₹5,066, or 3.2%, during the previous week, settling near ₹1.50 lakh per 10 grams.

In international markets, COMEX gold futures for August delivery climbed $91.04, or 2.15%, to $4,329.84 per ounce. The metal had ended the previous week nearly 3% lower at $4,238.8 per ounce.

Silver Extends Gains

Silver prices also strengthened alongside gold, supporting gains in silver ETFs. The rise in precious metals followed renewed demand after the announcement of a peace framework between Washington and Tehran. The accord includes efforts towards the reopening of the Straits of Hormuz, which is crucial for international oil transportation. This has helped to bring down crude oil prices, thereby lessening fears of inflationary pressure resulting from energy costs.

Global Factors Favor Gold and Silver

Market sentiment for precious metals has been boosted by the fall in value of the dollar and by low yields on Treasury bonds. The declining value of the dollar made gold and silver more attractive investments for foreign investors, while low interest rates were also favorable for them.

Investors are also monitoring upcoming monetary policy decisions from the U.S. Federal Reserve, the Bank of Japan and the Bank of England. Developments related to the implementation of the U.S.-Iran agreement, including discussions on Iran’s nuclear programme, are expected to remain in focus for commodity markets.
The rebound in bullion prices helped lift sentiment across precious metal ETFs, with both gold and silver funds recording broad-based gains during the session.