Gold, Silver ETFs Jump Up To 9% As Precious Metals Rebound On MCX

Gold and silver exchange-traded funds recorded sharp gains on February 4 as prices of both precious metals extended their rebound in domestic futures markets after a steep correction earlier this year.

Gold futures with April expiry on the Multi-Commodity Exchange of India rose over 4.5% to ₹1,60,755 per 10 grams during morning trade on February 4, according to MCX data. Contracts with June and August expiries also advanced by around 5% each on the same day. Despite the recovery, gold prices remained below the record highs touched in late January, as per exchange data.

Silver futures posted even steeper gains. The March expiry contract climbed 6% to ₹2,84,094 per kilogram, according to MCX. Silver contracts with May and July expiries gained 6% and 5%, respectively, during the session. Like gold, silver prices were still below their lifetime highs recorded last month.

Silver ETFs Outperform On Strong Price Rally

Silver-focused ETFs saw the strongest gains, mirroring the sharp move in silver futures. Tata Silver ETF rose by about 9%, while Kotak Silver ETF gained nearly 8% as of 10:30 am on February 4, according to data available on the National Stock Exchange.

Nippon India Silver ETF, ICICI Prudential Silver ETF, SBI Silver ETF, Aditya Birla Sun Life Silver ETF and UTI Silver ETF advanced by over 7% each during the session. Other products, including Groww Silver ETF, HDFC Silver ETF, and Zerodha Silver ETF, also rose around 7%. Edelweiss Silver ETF was among the top performers, gaining close to 9%, according to exchange data.

The rally followed a sharp decline in silver prices in late January after heightened volatility in global precious metals markets.

Gold ETFs Track Recovery In Futures

Gold ETFs also moved higher, tracking the rebound in gold futures on the MCX. The Wealth Company Gold ETF rose around 7% on February 4, while Quantum Gold ETF and Edelweiss Gold ETF gained over 5%, according to NSE data.

Several other gold ETFs, including Choice Gold ETF, Motilal Oswal Gold ETF, DSP Gold ETF, Axis Mutual Fund Gold ETF, Tata Gold ETF, Union Gold ETF, Zerodha Gold ETF, LIC MF Gold ETF, SBI Gold ETF, Invesco India Gold ETF, and Nippon India ETF Gold BeES, posted gains of more than 4% during the session.

Despite the rebound, gold ETF prices continued to trade below their late-January peaks, reflecting the incomplete recovery in the underlying metal, as per exchange figures.

Recent Correction And Market Context

The recent correction in gold and silver prices comes after a sharp correction in gold and silver prices after both metals reached record highs in January. The CME Group revealed in late January that the margin requirements for gold and silver futures contracts would go up. This is one of the reasons why the prices fell sharply in the global commodities market.

Global developments also influenced domestic prices. According to Reuters, U.S. dollar strength in late January weighed on precious metals internationally, contributing to the selloff. Gold and silver prices typically move inversely to the dollar, as noted in historical market data.

Global And Domestic Factors

Precious metal prices also tracked movements in overseas markets. Reuters data showed that global gold and silver prices rebounded in early February after recent losses, aiding sentiment in domestic markets. Exchange data indicate that both metals continue to see elevated volatility compared with December levels.

While the recovery has supported ETF prices, both gold and silver, along with their associated ETFs, remain below their lifetime highs recorded in late January, according to MCX and NSE data. Market participants continue to track price movements in futures markets and global cues for further direction in precious metals trading.