Gold & Silver ETFs Slip Across the Board as Bank, IT, Defence Funds Hold Firm

Mumbai, Sept 17: Indian ETFs closed lower across the precious-metals space on Wednesday, a day after the US Federal Reserve raised its benchmark interest rate by 25 basis points to a range of 3.75-4 per cent, its first hike since 2023. The rate increase strengthened the dollar and lifted US bond yields, denting demand for non-yielding assets such as gold and silver even as Brent crude held above 105 dollars a barrel amid continuing tensions tied to the Iran conflict. Bank, IT and defence ETFs, by contrast, closed mostly higher, tracking a mixed but resilient show from the broader equity market that shrugged off the overnight rate action. 

Every single gold ETF and every single silver ETF on the exchange closed in the red on Wednesday. All 26 gold-tracking ETFs and all 19 silver-tracking ETFs ended lower, a rare instance of complete alignment across both precious-metals categories, underlining how directly the Fed’s move weighed on the segment. 

Silver ETFs slide as a pack 

Every silver ETF on the list closed lower on Wednesday, with losses fairly uniform across the category. SilverBeES (SILVERBEES), India’s largest silver ETF by traded value, fell 0.81 per cent to close at Rs 216.69. Tata Silver ETF (TATSILV) slipped 0.86 per cent to Rs 22.01, while HDFC Silver ETF (HDFCSILVER) declined the most among the larger names, down 1 per cent to Rs 216.41. SilverIETF eased 0.78 per cent to Rs 226.30, and SBI Silver ETF (SBISILVER) fell 0.81 per cent to Rs 222.25. Even the smaller, thinly traded names posted some of the sharper declines, with ESilver down 1.26 per cent and SilverBETA down 1.04 per cent. With no silver ETF closing higher, Wednesday’s session broke a run of recent gains and reflected the pressure a stronger dollar typically puts on the metal. 

Gold ETFs follow silver lower 

Gold ETFs mirrored silver’s across-the-board decline. GoldBeES (GOLDBEES), the most heavily traded gold ETF, closed down 0.4 per cent at Rs 124.41. GoldIETF fell 0.46 per cent to Rs 128.84, Tata Gold ETF (TATAGOLD) eased 0.34 per cent to Rs 14.63, SETFGOLD slipped 0.44 per cent to Rs 128.31, and HDFC Gold ETF (HDFCGOLD) closed 0.39 per cent lower at Rs 128.61. Losses stretched across every gold ETF on the exchange, from the heavily traded names to thinly held ones such as LIC MF Gold ETF (LICMFGOLD), down 0.74 per cent, and HSBC Gold ETF (HSBCGOLD), down 0.72 per cent. Rate hikes typically raise the opportunity cost of holding non-yielding gold, and Wednesday’s session showed that playing out cleanly across the category. 

Bank ETFs close a mixed session 

Bank-related ETFs closed split, with seven of the 13 names on the list ending lower and six higher. BankBeES (BANKBEES), the largest by traded value, slipped 0.1 per cent to Rs 582.09. SETFNIFBK, however, added 0.06 per cent to close at Rs 577.75, and BankIETF rose 0.47 per cent to Rs 58.02, the category’s best performer. BankNifty1 (BANKNIFTY1) fell 0.26 per cent to Rs 58.17, while BankETF eased 0.14 per cent to Rs 572.76. The split outcome suggests investors stayed selectively engaged with banking ETFs even as the broader rate backdrop turned less favourable for the sector. 

IT ETFs mostly higher on a weaker rupee 

IT ETFs closed mostly higher, helped by a weaker rupee that supports dollar-denominated export revenue for the sector even as US rates rise. ITBeES (ITBEES), the category’s most traded ETF, gained 0.5 per cent to close at Rs 32.46. ITETF added 0.55 per cent to Rs 30.97, and ITIETF rose 0.56 per cent to Rs 32.45. SBI ETF IT (SBIETFIT) was the standout, up 0.69 per cent to Rs 324.44. Not every IT ETF joined the advance: Tech (TECH) fell 0.66 per cent to Rs 31.85, and ITAxis (ITAXIS) slipped 0.72 per cent to Rs 318.10, the category’s two decliners. 

Defence ETFs buck the trend with broad gains 

Defence ETFs stood out against the broader precious-metals weakness, with all three names on the exchange closing higher. Nifty India Defence ETF by Motilal Oswal (MODEFENCE) led the category, up 1.47 per cent to close at Rs 102. BSE India Defence-Tracking ETF (DEFENCE) rose 1.14 per cent to Rs 77.81, and Groww’s defence ETF (GROWWDEFNC) added 0.29 per cent to Rs 92.06. The clean sweep extended the segment’s resilience even on a day dominated by the Fed’s rate decision. 

Liquid ETFs stay flat, as always 

Liquid ETFs stayed true to form, closing largely unchanged. LiquidCase (LIQUIDCASE) edged up 0.03 per cent to Rs 115.96, LiquidBeES (LIQUIDBEES) closed flat at Rs 1,000.01, and Liquid1 (LIQUID1) added 0.01 per cent to Rs 1,122.95. None of the 20 liquid ETFs on the list moved by more than a few paise, reaffirming their role as a low-volatility parking spot for cash regardless of what the broader market, or the Fed, is doing. 

ETF Snapshot: Silver, Gold, Bank, IT, Defence, Liquid 

Source: https://www.nseindia.com/market-data/exchange-traded-funds-etf 

Gold and silver closed lower across the board after the Fed’s rate hike, defence and IT ETFs held firm, bank ETFs were mixed, and liquid ETFs stayed as steady as ever.