Gold and Silver ETFs delivered strong gains in the Indian market on Friday, tracking a sharp rise in global precious metal prices. Investor sentiment improved after weaker-than-expected US labor market data strengthened expectations that the US Federal Reserve could take a more accommodative approach toward interest rates in the coming months.
The positive global cues pushed both gold and silver exchange-traded funds (ETFs) higher, with silver-focused funds outperforming their gold counterparts as international silver prices posted a stronger rally.
Precious Metal ETFs Extend Gains
Gold ETFs traded firmly in the green throughout the session, reflecting renewed demand for safe-haven assets. Investors increased their exposure to bullion-backed funds after expectations of prolonged high US interest rates eased.
Among the leading funds, Nippon India Gold BeES advanced around 2.4% to ₹120.51, while ICICI Prudential Gold ETF climbed 2.4% to ₹124.90. SBI Gold ETF gained approximately 2.3% to ₹124.25, and Tata Gold ETF also rose about 2.3%, reaching ₹14.14.
The rally indicates that investors continue to prefer gold-linked investment products during periods of uncertainty in global financial markets.
Silver ETFs Outperform Gold Funds
Silver ETFs registered even stronger gains as international silver prices surged significantly during the trading session.
Nippon India Silver BeES increased roughly 2.6% to ₹221.95, while Tata Silver ETF also gained 2.6% to ₹22.55. SBI Silver ETF advanced about 2.5% to ₹227.28, and ICICI Prudential Silver ETF added nearly 2.4% to trade around ₹231.28.
The stronger performance of silver ETFs reflects growing optimism surrounding industrial demand as well as increased investor participation in precious metals.
Weak US Employment Data Boosts Bullion Prices
Global bullion prices received a major boost after fresh economic data from the United States pointed to a cooling labor market.
Recent non-farm payroll and private payroll figures came in below market expectations, reducing concerns that the Federal Reserve may need to keep borrowing costs elevated for a longer period. Lower interest rate expectations generally support precious metals because gold and silver do not generate interest income, making them relatively more attractive when yields decline.
As a result, investors shifted toward bullion as a defensive investment option.
Spot Gold Climbs Above $4,165 an Ounce
International gold prices extended their upward momentum during Friday's session.
Spot gold gained nearly 1% to trade around $4,165.29 per ounce, after touching its strongest level since late June. Meanwhile, US gold futures for August delivery rose approximately 1.3% to $4,178.50 per ounce.
The latest rally has placed gold on track for its first weekly gain in several weeks, with prices recording an overall increase of nearly 1.8% during the week.
Market participants are closely monitoring upcoming US economic indicators for additional clues regarding the Federal Reserve's monetary policy outlook.
Silver Continues Its Strong Uptrend
Silver also maintained impressive momentum in global markets.
Spot silver jumped about 2.1% to $62.28 per ounce, supported by stronger investment demand and improving market sentiment.
Other precious metals also traded higher. Platinum climbed approximately 2.4% to $1,655.15 per ounce, while palladium gained around 0.9% to $1,278.89 per ounce. All three metals remained close to their highest levels in more than a week.
Positive Mood Extends to Indian Equity Markets
The improvement in global risk sentiment also benefited Indian equities.
During afternoon trading, the Sensex was up around 288 points, trading near 77,790, while the Nifty 50 gained nearly 102 points to trade above 24,277.
Market breadth remained positive, with advancing stocks outnumbering declining shares. At the same time, the India VIX volatility index declined by more than 3%, indicating lower expectations of near-term market volatility and improving investor confidence.
Outlook for Precious Metal Investors
Market analysts believe that future movement in gold and silver prices will largely depend on upcoming US inflation readings, employment reports, and signals from the Federal Reserve regarding interest rates.
If expectations of monetary easing continue to strengthen, precious metals could remain well supported in the near term. However, investors should also watch currency movements, geopolitical developments, and central bank commentary, as these factors can significantly influence bullion prices.
For ETF investors, gold and silver funds continue to provide a convenient way to gain exposure to precious metals without purchasing physical bullion, making them an attractive option for portfolio diversification during uncertain market conditions.
