Gold, Silver ETFs Jump Up to 6% on Weak Dollar, MCX Shares at 52-week High

Gold and silver exchange traded funds (ETFs) surged up to 6% on Wednesday, tracking gains in precious metal prices as a weaker US dollar and softer-than-expected US inflation data lifted sentiment.

The rally follows data showing US producer price index (PPI) rose below expectations, easing immediate inflation concerns and weighing on the dollar. A weaker dollar makes gold cheaper for holders of other currencies, thereby boosting demand for bullion.

Among silver ETFs, Axis Mutual Fund's silver ETF rose 5.54%, while ICICI Prudential Mutual Fund and Kotak Mutual Fund silver ETFs gained 5.43% and 5.66%, respectively. Other funds including Mirae Asset, Motilal Oswal, HDFC and Nippon India silver ETFs also traded higher.

Gold ETFs saw relatively moderate gains. Nippon India ETF Gold BeES rose around 2%, while ICICI Prudential Gold ETF and Axis Gold ETF gained about 1.5% and 1.7%, respectively. Other gold ETFs such as UTI, Edelweiss, HDFC, Quantum and DSP also edged higher.

Global Cues, Iran Talks Support Prices

Bullion prices were further supported by optimism around renewed diplomatic engagement between the US and Iran, which lifted gold prices by over 2% during the session. Easing crude oil prices also helped reduce inflation concerns, providing additional support to metals.

However, the broader outlook remains mixed as expectations of delayed interest rate cuts, driven by energy-led inflation pressures, continue to cap gains in precious metals.

In international markets, spot gold held near a one-week high at $4,841.76 per ounce, while US gold futures for June delivery edged up 0.3% to $4,866.50. Spot silver also rose 0.4% to $79.87 per ounce.

Meanwhile, shares of Multi Commodity Exchange of India (MCX) rose 4.46% to hit a fresh 52-week high of ₹2,889, in line with gains in metal prices. The metal index also advanced 2.2%.

Other commodities also saw upward movement. Aluminium futures rose 0.65% to ₹369.05 per kg on the MCX, supported by fresh buying interest amid a positive trend in the spot market.