Gold and silver exchange-traded funds (ETFs) remained under pressure on Wednesday, tracking a fresh decline in global precious metal prices as renewed hostilities between the United States and Iran pushed oil prices higher, strengthened the US dollar and fuelled expectations that interest rates may remain elevated for longer.
Silver ETFs led the decline, falling nearly 5 per cent in morning trade, while gold ETFs slipped more than 3 per cent.
Among gold-backed funds, Nippon India Gold BeES fell 3.1 per cent to Rs 121.54, ICICI Prudential Gold ETF declined 3.3 per cent to Rs 125.69, SBI Gold ETF dropped 3.2 per cent to Rs 125.33 and Tata Gold ETF was down 2.9 per cent at Rs 14.29.
Silver-linked funds witnessed even steeper losses. SBI Silver ETF fell 4.8 per cent to Rs 226.08, Nippon India Silver ETF declined 4.8 per cent to Rs 220.89, ICICI Prudential Silver ETF dropped 4.7 per cent to Rs 230.82, while Tata Silver ETF slipped 4.8 per cent to Rs 22.42.
The weakness mirrored sharp declines in international bullion markets. Spot gold fell 1.9 per cent to USD 4,181.04 an ounce, its lowest level since March 23, while US gold futures for August delivery declined 1.9 per cent to USD 4,204.70 an ounce.
Silver also remained under pressure, with spot prices falling 2.1 per cent to USD 64.01 an ounce. Platinum and palladium traded lower as well.
Market participants attributed the sell-off to a combination of geopolitical tensions, rising crude oil prices and a stronger US dollar.
Renewed conflict between the US and Iran pushed crude oil prices around 1 per cent higher, raising concerns that inflationary pressures could intensify and delay monetary policy easing by major central banks.
The stronger dollar further weighed on precious metals by making gold and silver more expensive for holders of other currencies, thereby reducing demand. Higher energy prices have also reinforced expectations that central banks, including the US Federal Reserve, may need to keep interest rates elevated for longer to combat inflation.
In the domestic market, bullion prices reflected the global weakness. The price of 24-carat gold in Delhi stood at Rs 1,49,630 per 10 grams on June 10, while silver was quoted at Rs 2,35,520 per kilogram.
The decline in precious metal ETFs came despite gains in the broader equity market. During morning trade, the Sensex rose around 300 points and the Nifty gained nearly 76 points, although the positive sentiment in equities provided little support to gold and silver-linked investment products, which continued to track the correction in underlying metal prices. |
