Silver exchange-traded funds (ETFs) surged up to nearly 4% in intraday trade on Thursday as a sharp rebound in global and domestic silver prices lifted investor sentiment. The rally in the white metal was supported by a weaker US dollar, lower US Treasury yields and renewed buying interest in precious metals.
COMEX silver futures rose 1.38% to $66.73 per ounce in morning trade at 08:02 GMT on tHURSDAY. The LBMA spot silver price stood at $63.36 per ounce at the PM fixing on August 19. In the domestic market, MCX silver hovered around Rs 2,48,424 per kg.
The sharp move in the underlying metal was quickly reflected in Indian silver ETFs, with most of the leading funds gaining more than 3% during the session. ICICI Prudential Silver ETF rose 3.94% to Rs 235.12, while Axis Silver ETF gained 3.97% to Rs 233.96. Edelweiss Silver ETF advanced 3.91% to Rs 235.29 and Motilal Oswal Silver ETF climbed 3.81% to Rs 232.43.
Bandhan Silver ETF gained 3.73% to Rs 235.88, while 360 ONE Silver ETF rose 3.47% to Rs 231.13. Angel One Silver ETF added 3.46% to Rs 8.97.
The rally also highlights the strong returns delivered by silver ETFs over the past year. ICICI Prudential Silver ETF has generated one-year returns of 101.99%, followed by Axis Silver ETF at 101.36%, Edelweiss Silver ETF at 101.15%, 360 ONE Silver ETF at 101.07% and Motilal Oswal Silver ETF at 100.84%.
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Among the seven funds, Bandhan Silver ETF and Angel One Silver ETF also participated strongly in the latest rally, although one-year return data for these two funds was not provided.
The decline in US Treasury yields has emerged as a key catalyst for the latest rally in precious metals. Lower long-term US yields have weighed on the dollar, creating a favourable environment for dollar-denominated commodities such as silver.
The Indian currency also strengthened against the US dollar on Thursday, with the rupee appreciating 17 paise to 95.56 in early trade. A softer dollar generally supports commodity prices by making dollar-denominated assets relatively more attractive to buyers using other currencies.
Silver is currently outperforming gold, helped by its higher price volatility and its dual role as both a precious metal and an industrial commodity. Demand from industrial applications adds another layer of support to the metal, particularly when expectations around global economic activity and manufacturing remain firm.
The latest rally also comes after a sharp correction in silver prices, with the metal falling below $58 per ounce in the recent past. The subsequent recovery has therefore attracted renewed buying interest as investors reassess the outlook for precious metals.
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