Gold, silver ETFs rebound as three-day rout in precious metals ends

Gold and silver exchange-traded funds (ETFs) snapped their three-day rout on Tuesday as precious metals stabilised and rebounded, with the sharp recent fall seen largely as a technical correction in the metal prices.

Among silver ETFs, the HDFC Silver ETF rose 10 per cent, while the Nippon India Silver ETF gained 5 per cent. Kotak Silver ETF was up 10 per cent, and ICICI Prudential Silver ETF advanced 5 per cent, while SBI Silver ETF and Axis Silver ETF were up nearly 9 per cent.

Gold ETFs also came under pressure. The Aditya Birla Sun Life Gold ETF advanced 3 per cent, Axis Gold ETF rose 5 per cent and Tata Gold ETF gained 5 per cent. Nippon India Gold ETF and LIC MF Gold ETF gained 4 per cent.

The ETFs were taking cues from the rise in gold and silver prices. Multi-Commodity Exchange (MCX) gold April 2 futures are up 3.49 per cent at ₹1,49,017 per 10 grams on Tuesday, while the March contracts for MCX silver were up 6.92 per cent at 2,52,603 per KGS.

A dramatic unwind hit gold and silver markets over the past two days, erasing a chunk of their record-breaking January gains, Hareesh V, Head of Commodity Research, Geojit Investments, said. The plunge began after CME Group hiked margin requirements on both metals, forcing leveraged traders to liquidate positions and accelerating a wave of selling, he said.

The correction was amplified by extreme overbought conditions after gold and silver touched unprecedented highs just days earlier, with silver having surged more than 60 per cent in a month and gold over 20 per cent, Hareesh said. Profit-taking cascaded into panic selling as liquidity thinned and volatility spiked. "The violent drop more like a technical correction than a deterioration in core fundamentals, noting that longer-term drivers-geopolitical tensions, central-bank buying and macro uncertainty- remain intact."

Tech view for Gold and Silver

The ₹1,43,000-₹1,45,000 area, earlier a support, is now acting as immediate resistance for the MCX Gold futures, Ponmudi R, CEO of Enrich Money, said. "A sustained move above ₹1,50,000 could revive upside momentum toward ₹1,65,000-₹1,70,000, keeping the medium-term outlook positive despite near-term swings."

MCX Silver futures have corrected sharply and are trading near key structural levels between ₹2,20,000 and ₹2,60,000, after surging above ₹4,00,000 and printing record highs near ₹4,20,048, Ponmudi said. "The ₹2,20,000-₹2,35,000 zone is a critical base, while ₹2,60,000-₹2,70,000 acts as immediate resistance."