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Gold and Silver Exchange Traded Funds (ETFs) witnessed a strong rally on Wednesday, with silver significantly outperforming gold during the trading session. Precious metal prices surged amid falling crude oil prices and weakness in the US dollar index, creating favorable conditions for safe-haven investments.

While both gold and silver ETFs delivered gains, silver-based funds led the rally with returns exceeding 2.5 percent in several cases. Analysts say the growing industrial demand for silver, along with improving investor sentiment toward precious metals, played a major role in the sharp rise.

Silver ETFs Outperform Gold ETFs

Silver ETFs emerged as the top performers during the session, posting strong gains across the board.

Among the biggest gainers:

• Nippon India Silver ETF climbed around 2.62 percent to ₹234.89
• ICICI Prudential Silver ETF also gained approximately 2.62 percent and traded near ₹244.99
• SBI Silver ETF rose about 2.57 percent
• Tata Silver ETF advanced nearly 2.58 percent

The strong performance reflected rising investor confidence in silver as both a precious metal and an industrial commodity.

Gold ETFs Also Registered Healthy Gains

Gold ETFs also moved higher during the session, although the pace of gains remained lower compared to silver funds.

Some of the notable movers included:

• ICICI Prudential Gold ETF which rose around 1.74 percent to ₹128.75
• SBI Gold ETF gained approximately 1.66 percent
• Nippon India ETF Gold BeES climbed nearly 1.63 percent
• Tata Gold ETF moved up around 1.61 percent

The gains followed a strong upward movement in underlying gold prices on the Multi Commodity Exchange (MCX).

MCX Gold and Silver Prices Witness Massive Jump

The rally in precious metal ETFs was mainly driven by sharp gains in MCX gold and silver futures.

Gold Prices on MCX

Gold contracts for June delivery reportedly opened at around ₹1,52,000 per 10 grams, sharply higher than the previous closing price of ₹1,49,753.

This represented an increase of nearly ₹2,247 or around 1.5 percent at the opening itself.

As trading progressed, gold prices extended gains further and touched nearly ₹1,52,590 during afternoon trade, reflecting an intraday rise of around 1.9 percent.

Silver Continued to Outperform Gold

Silver once again emerged as the stronger metal during the trading session.

July delivery silver contracts reportedly opened at ₹2,49,316 per kilogram, showing gains of around 2.04 percent at the start of trading.

The momentum continued throughout the day, and silver prices later surged to nearly ₹2,54,338 per kilogram during afternoon trade.

Compared to the previous close, this represented a sharp rise of approximately 4.1 percent — far higher than gold’s gains during the same session.

Two Major Global Factors Behind the Rally

Market experts attributed the surge in precious metals mainly to two international developments:

1. Falling Crude Oil Prices

Crude oil prices witnessed a sharp decline after reports suggested the possibility of easing tensions between the United States and Iran.

Lower oil prices often reduce inflation-related pressures and create favorable conditions for precious metals.

2. Weakness in the Dollar Index

The US dollar index also weakened during the session.

Traditionally, gold and silver become more attractive when the dollar loses strength because weaker dollar conditions make precious metals relatively cheaper for global investors.

The combination of falling oil prices and a weaker dollar created strong support for gold and silver prices worldwide.

Why Investors Are Increasingly Interested in Silver

Analysts say silver is attracting growing investor attention because it offers a unique combination of safe-haven appeal and industrial demand.

Unlike gold, silver is extensively used in sectors such as:

• Solar energy
• Electronics manufacturing
• Electric vehicles (EVs)
• Industrial equipment

As global demand for renewable energy and advanced electronics continues rising, silver consumption has also remained strong.

This industrial utility gives silver additional growth potential beyond traditional investment demand.

MCX Shares Also Benefited From the Rally

The rally in commodity prices also positively impacted the shares of Multi Commodity Exchange of India.

The company’s stock reportedly rose around 2.33 percent on the NSE and closed near ₹2,970.

Higher trading activity in commodities such as gold and silver generally benefits exchanges through increased transaction volumes.

Precious Metals Regaining Investor Attention

The latest rally suggests that investors are once again turning toward precious metals amid global uncertainty and changing macroeconomic conditions.

Gold continues to remain a preferred hedge during periods of market volatility, while silver is increasingly benefiting from both investment demand and industrial consumption trends.

Experts believe that if dollar weakness persists and geopolitical tensions remain uncertain, gold and silver prices may continue witnessing strong investor interest in the near term.

However, analysts also caution that commodity markets remain highly volatile, and investors should carefully evaluate risk before making investment decisions in ETFs or precious metals.

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