Gold And Silver ETFs Jump Up To 9% On March 2 As Iran Conflict Widens

ETFs Rally As Equities Decline

At around 11 am on March 2, benchmark indices Sensex and Nifty were down about 1.4%, while silver-linked ETFs gained as much as 9%, according to exchange data reported by Reuters.

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Angel One Silver ETF rose around 9%. Tata Silver ETF, ICICI Prudential Silver ETF and Axis Silver ETF were up more than 6%. SBI Silver ETF and HDFC Silver ETF traded between 5% and 6% higher during the session.

On the gold side, most gold ETFs were trading 3–4% above their previous close, reflecting gains in domestic bullion prices.

Bullion Prices On MCX

The surge in ETFs tracked gains in underlying futures prices on the Multi-Commodity Exchange (MCX). MCX gold futures opened at ₹1,66,816 per 10 grams on March 2, up 2.91%, according to MCX data cited by Reuters.

Silver futures on MCX rose 2.61% to ₹2,90,188 per kg during the session.

Internationally, bullion prices strengthened after the escalation in West Asia, pushing investors towards traditional safe-haven assets, according to Reuters.

Shift Towards Safe-Haven Assets

Reuters reported that the U.S. and Israel carried out strikes on Iran, intensifying geopolitical tensions in the region. The development has led to volatility in the equity markets globally and an increase in investments in precious metals.

Gold is a widely accepted safe-haven asset that is monitored during a rise in geopolitical tensions and economic uncertainty. Silver, while a precious metal, has a tendency to move in tandem with gold, but with a wider volatility index, mainly because of its industrial demand component, as seen in data trends for the market.

The increase in gold ETFs and silver ETFs on March 2 has coincided with a fall in the domestic equity markets and a rise in bullion futures contracts traded on MCX, indicating a shift in investor appetite for precious metals during a rise in geopolitical uncertainty.

The movement in markets on March 2 reflects a rise in bullion-backed ETFs as a result of a rise in tensions in West Asia.