Bullion Explosion: Gold, Silver ETFs Surge Up to 18% as West Asia Conflict Escalates

Gold and silver exchange-traded funds (ETFs) recorded historic intraday gains of up to 18% on Monday morning as investors rushed toward safe-haven assets following escalating hostilities in West Asia. The rally was fueled by a sharp spike in international bullion prices, with silver outperforming gold, and a weakening Indian rupee, which hit 91.26 against the dollar. While equities witnessed a bloodbath (Sensex down over 1,000 points), precious metal ETFs acted as the primary portfolio hedge for diversified investors.

Record-Breaking Rally in Precious Metal ETFs

Precious metal ETFs saw unprecedented buying interest in early trade:

• Silver ETFs: Leading the rally, several funds, including Tata Silver ETF and Nippon India Silver ETF, saw intraday spikes between 13% and 18%.
• Gold ETFs: Tracking the rise in international spot prices, gold-backed funds like SBI Gold ETF and HDFC Gold ETF posted gains of 8% to 10%.

The rally in ETFs mirrors the chaos in domestic equity benchmarks, where the Nifty 50 plummeted below the 24,900mark, driving a massive rotation into bullion.

Underlying Bullion Strength Driving NAV Gains

The rise in ETF prices reflects a vertical move in global metal prices:

• International Gold: Trading near $5,180 - $5,200 per ounce.
• International Silver: Witnessing a massive "short squeeze," with prices surging toward $90 per ounce.
• Domestic Impact: On the MCX, gold futures for April delivery are trading near ₹1,67,900 per 10 grams, while silver has crossed the ₹2.84 lakh per kg mark.

Because ETFs are backed by physical bullion, their Net Asset Values (NAVs) have adjusted in real-time to these extreme price movements.

2026 Inflows and Market Context

The current spike comes amidst an already robust year for metal funds:

• Gold ETFs: Have attracted nearly $18 billion in global net inflows so far in 2026.
• Silver Growth: Indian silver ETFs have seen their AUM expand by over 40% in the last 12 months, driven by retail interest in silver as a "hybrid" asset (safe-haven + industrial metal).
• Currency Factor: The Indian rupee’s slide to 91.26 has increased the landed cost of imported gold, further boosting domestic ETF prices.

Why Investors are Buying

1. Direct military strikes in Iran have introduced extreme uncertainty into global markets.
2. With Brent crude jumping 10% to $78.50/bbl, bullion is being used as a primary inflation hedge.
3. The Sensex's 1,100-point drop has triggered "stop-loss" selling in stocks and "panic buying" in metals.

Also read: Dalal Street Shakes: West Asia War Fears Trigger 1% Nifty, Sensex Crash