Gold and silver ETFs jump up to 13% after 3-day selloff. Here’s what drove the rebound

After a three-day sell-off, gold and silver ETFs rebounded by up to 13% on Tuesday (February 3) as fresh buying emerged at lower levels on the MCX, supporting a recovery in metal prices.

MCX silver futures for March 5 surged 6%, gaining Rs 13,739 to trade at Rs 2,50,000 per kg. Gold futures for April 2 delivery climbed Rs 4,309, or 3%, to Rs 1,48,300 per 10 grams.

How gold and silver ETFs fared?

360 ONE Silver ETF rose the most, jumping about 13% to a day’s high of Rs 256 from its previous close of Rs 234. Zerodha Silver ETF advanced 11% to a day’s high of Rs 26.39, compared with its prior close of Rs 23.7.

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Mirae Asset Silver ETF, HDFC Silver ETF, UTI Silver ETF, Kotak Silver ETF and SBI Silver ETF rose up to 10% each.

Among gold ETFs, Union Gold ETF led the gains, climbing about 10%. Bandhan Gold ETF advanced 8%, while Motilal Oswal Gold ETF, Nippon India Gold ETF, Mirae Asset Gold ETF and several others in the category rose up to 5%.
In international markets, spot gold surged 3.7% to $4,837.16 an ounce by 0120 GMT, rebounding from a near one-month low hit in the previous session. The yellow metal had touched an all-time high of $5,594.82 on Thursday. Spot silver jumped 5.9% to $84.09 an ounce after hitting a record peak of $121.64 last week.Meanwhile, the dollar held on to its gains on Tuesday, supported by upbeat economic data and shifting expectations around US Federal Reserve policy, even as concerns lingered over a partial US government shutdown. A firmer dollar typically weighs on bullion, as it makes greenback-priced gold more expensive for holders of other currencies.

What experts say?
Manoj Kumar Jain of Prithvi Finmart said precious metals are witnessing very high volatility, though key support levels are likely to hold in the near term. Silver prices may sustain above $65 per troy ounce, while gold could hold support near $4,440 per troy ounce on a weekly closing basis.

Jain expects gold and silver to remain volatile this week amid fluctuations in the dollar index, ahead of US jobs data and ongoing geopolitical tensions and recommends buying gold between Rs 1,44,000–1,38,000, with a stop loss below Rs 1,35,000, targeting Rs 1,48,800–1,52,500. For silver, Jain suggests buying around Rs 2,40,000–2,28,000, with a stop loss below Rs 2,21,000, for targets of Rs 2,50,000–2,58,000.

Sandip Raichura, CEO of Retail Broking and Distribution and Director, PL Capital, said gold remains a structural buy, and even with the uncertainty around deals dissipating, longer-term phenomena will ensure gold crosses USD 6,000 in the next 18 months.

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Silver remains in a speculative zone, but the reality of physical shortages and premia sustaining in China, combined with a prospective rebound in demand, will ensure we don’t go much lower from current levels, Raichura said.

What happened in last 3 days?
Over the last three days, MCX silver futures for March 5, tumbled 40.5% or Rs 1.63 lakh to end the Monday session at Rs 2,32,500 per kilogram. Gold futures for April 2 delivery also came under heavy pressure, sliding Rs 40,000 or 22%, to Rs 1,43,991 per 10 grams.

The dollar held on to recent gains as investors assessed the potential policy stance of the U.S. Federal Reserve under Kevin Warsh, who is seen as favouring a smaller balance sheet. A firmer dollar typically weighs on gold prices, as it makes the greenback-priced metal more expensive for buyers using other currencies.