Gold, silver ETFs surge 17% on US-Iran tensions, tariff uncertainties
What's the story
Gold and silver Exchange Traded Funds (ETFs) witnessed a major spike on Monday. The rise was mainly due to the escalating tensions between the United States and Iran. President Donald Trump's decision to impose new global tariffs also contributed to the demand for these precious metals as safe havens. Several silver ETFs saw massive gains while gold ETFs also posted gains.
Market performance
Silver ETFs surge by up to 17%
The Groww Silver ETF led the gains, surging nearly 17% to reach an intraday high of ₹28.22. Other funds such as Mirae Asset Silver ETF, HDFC Silver ETF, SBI Silver ETF, and Axis Silver ETF also jumped by around 10% each. The gold ETFs also witnessed a rise of up to 6%, with Tata Gold ETF jumping by 6% to hit day's high of ₹15.9.
Contract values
Gold, silver prices in spot market
The April gold futures on the Multi Commodity Exchange (MCX) were trading at ₹1,60,600 per 10gm around 9:05am up by ₹3,700 or 2.4% from Friday's close. Meanwhile, March Silver contracts hovered around ₹2,68,120 per kg, up by a 6% or ₹15,200. The yellow metal prices on COMEX were also higher by over 2% or $109 and traded at $5,189.6 an ounce at the time of writing.
Geopolitical influence
Trump warns Iran of military action
On Friday, Trump warned Iran that military action could follow if Tehran doesn't "better negotiate a fair deal." The USS Gerald R. Ford aircraft carrier was deployed to the Mediterranean Sea as part of a larger US military build-up in the region. This geopolitical tension has further fueled demand for gold and silver ETFs as safe-haven investments.
Tariff impact
Trump's tariffs impact gold, silver prices
In another major development, the US Supreme Court ruled Trump's 'Liberation Day' tariffs illegal for overstepping his authority. After the decision, Trump signed documents imposing a 10% tariff on imports from all countries, effective almost immediately. On Saturday, he raised the tariffs to 15%. This move has also impacted gold and silver prices in the market.