ETFs glitter again: Gold, silver ETFs rally up to 3% amid US tariff turmoil; structural bull case intact

Gold and silver ETFs surged up to 3% on February 25 as investors rotated into safe-haven assets amid escalating geopolitical tensions and renewed uncertainty around U.S. trade tariffs. The trigger came after the US Supreme Court struck down several measures introduced by President Donald Trump, reviving policy volatility and adding to global risk aversion.

Domestic bullion prices strengthened in line with global trends. On the MCX, gold rose around 0.6% to trade near ₹1,60,900 per 10 grams, gaining roughly ₹900–₹960 from the previous close of ₹1,59,969. Silver outperformed, climbing more than 2% to approximately ₹2,66,700 per kg, up over ₹5,600–₹6,000 from its prior settlement.

In international markets, Comex gold advanced 0.3–0.5% to hover near $5,200 per ounce, while Comex silver surged 2.7–3.2% to trade close to $90 per ounce, reflecting continued investor preference for defensive assets.

Gold ETFs

Gold ETFs mirrored the strength in underlying prices. Most domestic gold ETFs posted gains between 0.34% and 0.71% in the latest session, with LIC Gold ETF leading daily advances. Other large funds, including Kotak, HDFC, ICICI Prudential and Nippon Gold ETFs, recorded steady upticks.

In terms of size and liquidity, Nippon Gold ETF remains the clear market leader with assets exceeding ₹58,700 crore, followed by ICICI Prudential Gold ETF (₹25,973 crore) and HDFC Gold ETF (₹23,297 crore). Higher AUM and trading volumes typically translate into tighter bid-ask spreads and better execution efficiency, particularly for institutional and high-value investors.

Short-term momentum remains supportive. One-month returns across major gold ETFs range between 2% and 4.5%, while three-month returns cluster around 28–29%, underscoring the strength of gold’s recent rally.

Silver ETFs

Silver ETFs also traded firmly higher, with most funds gaining between 0.9% and 1.5%. Kotak Silver ETF led the pack, followed by DSP, Axis and UTI Silver ETFs.

Despite the latest bounce, short-term performance remains volatile. One-month returns across major silver ETFs remain negative in the -13% to -15% range, reflecting recent profit-booking after a sharp rally. However, three-month returns remain exceptionally strong at over 71–72%, highlighting silver’s higher beta compared to gold.

Nippon Silver ETF dominates the segment with AUM exceeding ₹35,500 crore, followed by ICICI Prudential, HDFC and SBI Silver ETFs. As with gold ETFs, fund selection should prioritise liquidity, tracking efficiency and expense ratios rather than marginal return differences.

Structural bull case for gold

Beyond short-term price action, the broader outlook remains constructive. According to Motilal Oswal Wealth Management’s Precious Metals Quarterly (23 February 2026), gold’s breakout above $5,000 per ounce represents a structural re-rating rather than a cyclical spike.

The report identifies three key drivers: elevated U.S. fiscal stress, record central bank accumulation, and compression in real yields. With U.S. federal debt exceeding $38 trillion and central banks continuing to diversify reserves into gold, official-sector demand provides a durable price floor.

Outlook on gold ETFs

The report also highlights renewed investor participation through gold ETFs. After years of outflows, ETF holdings have stabilised and reversed, indicating reallocation from conventional financial assets into bullion-backed instruments. In India, gold ETF AUM has expanded meaningfully, supported by rising retail adoption and currency depreciation dynamics.

Gold ETFs offer distinct advantages:

High liquidity and transparent pricing

Lower storage and transaction costs versus physical gold

Ease of rebalancing within diversified portfolios

Efficient tactical exposure amid volatility

With mine supply growth capped at 1–2% annually and central bank demand elevated, incremental ETF flows can materially tighten physical availability, amplifying upside momentum.

Strategic view: A disciplined 5–10% allocation via gold ETFs remains a prudent hedge against fiscal fragility, geopolitical risk, and structural monetary uncertainty