Gold and silver ETFs fall amid stronger US dollar and global volatility

Gold ETFs were also under pressure. Axis Mutual Fund Gold ETF, Union Gold ETF, and The Wealth Company Gold ETF traded lower by over 4 per cent

 

Gold and silver exchange-traded funds (ETFs) came under pressure on Wednesday, March 3, reversing gains after hitting a more than four-week high on Monday, March 2. The sharp fall in precious metals was driven by a strengthening U.S. dollar, which offset safe-haven flows triggered by the escalating US-Israeli air war against Iran, creating volatility across global markets.  The move mirrors a broader sell-off in global markets, as Indian markets reopened on Wednesday after a holiday on Tuesday, March 2, on account of the Holi festival.

  Silver ETFs witnessed steep losses on Wednesday. HDFC Silver ETF plunged 8.5 per cent, while UTI Silver ETF, Groww Silver ETF, Tata Silver ETF, Axis Silver, and ICICI Prudential Silver ETF each declined more than 7 per cent.

 

Gold ETFs were similarly under pressure. Axis Mutual Fund Gold ETF, Union Gold ETF, and The Wealth Company Gold ETF fell over 4 per cent, whereas Grow Gold ETF, ICICI Prudential Gold ETF, Bandhan Gold ETF, and DSP Gold ETF lost around 3.7 per cent each.

 

Commenting on the sell-off, Hareesh V, head of commodity research at Geojit Financial Services, said, “The fall corresponds to international markets. Yesterday, our markets were closed due to a holiday, so the sell-off was not witnessed locally. Today, the movement is aligning with international prices. Before yesterday, international silver prices were around $96–$97, but yesterday they fell below $78, representing a 10–15 per cent decline. Since the Indian market was closed, this reflected in today’s trading. Additionally, a sharp recovery in the US dollar contributed to the decline in gold and silver.”

 

On the outlook for precious metals, he added, “The broad outlook for gold remains positive due to ongoing geopolitical tensions and strong fundamentals. We expect gold to recover further. Silver, however, may experience choppy trading, as speculative transactions dominate. Overall, we remain bullish on gold, while silver may show a mild positive bias.”

 

On the MCX, however, gold and silver futures traded with gains on Wednesday. Gold April 2 futures rose 1.53 per cent to ₹1,63,581 per 10 gm, while Silver May 5 futures gained 3.08 per cent to ₹2,73,500 per kg, according to MCX data.

 

“For MCX gold, prices are currently consolidating with a mildly positive bias as safe-haven demand remains supported by global geopolitical uncertainty. Strong buying interest is visible within the ₹1,58,000–₹1,62,000 demand zone, which has emerged following the recent surge driven by Middle East tensions. If prices continue to hold above this base and achieve a sustained breakout above ₹1,70,000, momentum may extend toward ₹1,75,000–₹1,80,000, maintaining a constructive medium-term outlook,” said Ponmudi R, CEO of Enrich Money.

 

For MCX silver, Ponmudi R said, “The long-term bullish framework remains intact, supported by favorable global cues amid heightened geopolitical tensions. Prices continue to extend their upward trajectory, with short-term momentum turning decisively positive. Key support lies within the ₹2,50,000–₹2,70,000 zone. A sustained hold above this region could trigger further upside toward ₹3,00,000–₹3,20,000. Dips toward strong support zones may provide accumulation opportunities for positional traders, although a decisive breakdown below these levels could accelerate downside pressure.”  

 

Meanwhile, oil prices were higher, with Brent crude up 1.49 per cent at $82.61 per barrel and WTI crude rising 1.09 per cent to $75.37 per barrel.