Precious Metal ETFs Take a Breather: Why Thursday’s Dip Is a Buying Signal, Not a Warning

Mumbai, June 18: Gold and silver exchange-traded funds saw profit-booking on Thursday, with leading ETFs slipping between 1 and 2 per cent intraday even as their long-term performance narratives remain compelling. The pullback comes after a sustained rally in precious metals driven by geopolitical uncertainty around the Iran-US-Israel conflict, a weakening US dollar, and strong domestic demand. Despite Wednesday’s dip, SILVERBEES, GOLDBEES, and HDFCSILVER — the three most actively traded precious metal ETFs on the NSE — have delivered extraordinary returns over the past year, underscoring the structural case for holding gold and silver in a diversified portfolio.

SILVERBEES: Silver’s Stellar Year Powers India’s Most-Traded Commodity ETF

SILVERBEES, the Nippon India Silver ETF tracking the LBMA Silver daily spot price, remains India’s largest precious metal ETF by traded value at Rs 450.29 crore on Thursday. The fund slipped 1.83 per cent to Rs 230.37 intraday against a previous close of Rs 234.67 — a correction entirely consistent with profit-booking after an extraordinary run. Over the past 365 days, SILVERBEES has returned a staggering 125.23 per cent, making it one of the top-performing ETFs on the Indian exchange regardless of asset class.

The silver rally has been fuelled by a potent combination of industrial demand — particularly from the solar panel and electric vehicle battery sectors — and safe-haven buying as geopolitical tensions kept investors cautious. The global silver deficit, with demand outstripping mine supply for the third consecutive year, has given silver a structural tailwind that gold alone does not enjoy. Thursday’s dip, with the ETF still well above its 52-week low of Rs 101.35, reflects temporary selling pressure rather than any change in fundamentals.

GOLDBEES: The Gold Standard in ETF Investing Holds Its 365-Day Shine

GOLDBEES, the Nippon India Gold ETF and the benchmark gold ETF in India by trading volumes, saw Rs 248.70 crore change hands on Thursday — second only to SILVERBEES among commodity ETFs. The fund eased 1.26 per cent to Rs 122.19 against a previous close of Rs 123.75, as bullion spot prices moderated on hopes of a de-escalation in Middle East tensions following diplomatic signals from Washington.

Yet the 365-day return of 49.89 per cent tells the real story. Gold’s role as the ultimate hedge against inflation, currency risk, and geopolitical shock has been repeatedly validated this year. The RBI’s continued gold purchases, robust retail demand ahead of the festive and wedding season, and a weaker rupee relative to the dollar have all reinforced domestic gold prices even when international spot rates softened. For retail investors, GOLDBEES remains the most liquid and cost-efficient route into gold, with volumes of over 2 crore units traded on Wednesday alone.

HDFCSILVER: HDFC’s Silver Play Mirrors the Bullion Boom with Institutional Backing

HDFCSILVER, the HDFC Silver ETF, fell 1.90 per cent to Rs 230.24 on Thursday from a previous close of Rs 234.70, recording Rs 66.31 crore in traded value — a reflection of growing institutional and retail participation in silver as a distinct asset class. Like SILVERBEES, HDFCSILVER tracks domestic silver prices benchmarked to LBMA fixing, and has delivered 124.77 per cent returns over the past year, nearly matching its larger peer.

The 30-day return of -7.35 per cent for both silver ETFs signals a consolidation phase after an outsized run — not an inflection point. Analysts tracking commodity cycles note that silver typically undergoes sharp but short corrections before resuming its trend when industrial demand remains robust. With India emerging as a major solar manufacturing hub under the PLI scheme and EV adoption accelerating, the long-term demand case for silver — and by extension HDFCSILVER — remains firmly intact. The ETF’s 52-week range of Rs 101.66 to Rs 359.00 captures the full scale of the silver rally investors have been riding.

Thursday’s pullback in gold and silver ETFs is best read as a breather within a multi-year bull run rather than a reversal. Persistent geopolitical risk, central bank gold accumulation, the global silver supply deficit, and India’s growing industrial appetite for precious metals continue to support the long-term investment case. For investors holding or considering positions in SILVERBEES, GOLDBEES, or HDFCSILVER, the story has not changed — only the entry price has improved.

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