Gold And Silver ETFs Rally On Rising Global Tensions

Gold and silver Exchange-Traded Funds (ETFs) snapped a two-day slide on Wednesday, rising up to 3% as investors rushed back to bullion amid rising global tensions and fresh trade worries.

The shift in tone comes after a weak start to the week. On Monday, most commodity-linked ETFs had dropped nearly 3% as traders locked in profits. By midweek, however, risk appetite had turned cautious again.

The immediate trigger was policy uncertainty in the United States. The Supreme Court of the United States struck down several measures introduced by President Donald Trump, reviving concerns over trade and regulatory direction.

The recently implemented 10% global tariff has also unsettled markets. Investors are now watching the US–Iran talks scheduled in Geneva on 26 February for further cues.

Bullion Prices Climb On MCX

Domestic prices moved higher in early trade.

• MCX gold futures for April 2026 delivery rose ₹1,103, or 0.7%, to ₹1,61,072 per 10 grams.
  
• Silver futures for March 2026 delivery jumped ₹7,246, or 2.7%, to ₹2,67,990 per kg.

Silver clearly outpaced gold during the session. Overseas markets reflected a similar trend.

Gold traded about 0.5% higher near $5,175 per ounce after falling more than 1% in the previous session on profit booking. Spot silver gained roughly 1% to move above $88 per ounce, extending gains after touching a two-week high earlier this week.

ETF prices tracked the underlying move.

HDFC Silver ETF led the gains, climbing close to 3% to ₹256.88 from ₹250.61. Nippon India Silver ETF, Tata Silver ETF, ICICI Prudential Silver ETF and Zerodha Silver ETF advanced around 2% each.

Among gold funds, Zerodha Gold ETF, ICICI Prudential Gold ETF and UTI Gold ETF rose about 3%. Union Gold ETF and The Wealth Company Gold ETF added roughly 2%, while several others posted smaller gains.

Is Safe-Haven Buying Making A Comeback?

The bounce reflects a familiar pattern. When geopolitical tension rises or trade risks intensify, money tends to rotate into assets perceived as relatively stable.

Silver’s sharper percentage gain shows how quickly it reacts during risk-off phases. Unlike gold, which is largely a monetary hedge, silver also carries industrial demand exposure. That combination often leads to larger swings on both the upside and downside.

Short-term volatility remains high. Currency movements, particularly in the dollar index, and headlines around trade negotiations are likely to keep prices moving. At the same time, expectations around US interest rates could influence the pace of further gains.

Does The Structural Support For Gold Still Hold?

In addition to the day-to-day price action, the underlying structure in gold has not changed much. Prices did move past the $5,000 per ounce level, which many investors view as a structural move versus a price spike.

The federal debt in the US has risen past $38 trillion, and the focus on sustainability will continue. Central banks continue to add to their gold reserves. Mine production has risen at a relatively low rate of 1% to 2%. With the relatively low rate of new production, the price impact of new inflows to gold ETFs can be larger.

In India, assets in gold ETFs continue to grow. They benefit from retail participation and the ease of holding gold in demat form. Assets in larger gold ETFs also show better liquidity.

Investor Takeaway

The strength in gold and silver ETFs shows the mercurial nature of investor sentiment in uncertain markets. Trade policy, geopolitics, and currency markets will keep markets volatile.

Investors should keep a balanced approach to gold ETFs during uncertain times. While silver may have greater upside potential in a rally, it also has greater downside potential.

Sources:

Economic Times
MSN
BusinessToday