Monday was no exception. A sudden thaw in relations between the US and Iran got under the skin of precious metals, and for Indian investors it has been a question of whether to run after the rally or hold the line. Some silver ETFs were up 8%, with a lot of the gold and silver funds in the 4% range.
Why the spike in metals?
De-escalation is the main story. According to Pakistani PM Shehbaz Sharif, a deal in the works will see the US lift its blockade on Iran and the Strait of Hormuz open up again, with a formal ink in Switzerland on Friday.
Then you have the softer dollar and US Treasury yields, which are good for bullion. On the world stage, spot gold was 2% in the green at $4,304.11 an ounce – the best we’ve seen since June 9. US August gold futures followed suit, up 2% to $4,325.20.
Silver has been making its mark too. Spot silver is at $70.07, up 3.1%. Some would say the pullback we saw last week only made this rebound all the more pronounced when the geopolitical mood changed.
Who’s up in the ETFs
If you look at the numbers in India, you see a mix of steady gains and a couple of standouts. Of the 18 silver ETFs, Angel One Silver had the top spot with an 8% kind of day, peaking at Rs 9.83. You also had ICICI Prudential and Bandhan silver ETFs in the 6% club.
The rest of the field – SBI, HDFC, Zerodha – put on 3% to 5%. In other funds, Tata and Kotak were up to 4%, Nippon India 3.7%, HDFC 3.68% and DSP 3.9%.
Gold was in on it, but not with as much fanfare. We’re talking 2-4% across 22 of them. Nippon India and HDFC were 2% in the plus. Then there’s Tata at 2%, Nippon India 1.75%, ICICI 1.82% and SBI 1.7%.
Futures are in agreement
The derivatives side of things is in step with what we’re seeing in the ETFs. Take MCX: July 2026 silver futures have moved up Rs 7,200, or 2%, to Rs 2,53,345 a kg. August 2026 gold futures put in a 2% gain, up Rs 3,301 to Rs 1,53,829 for 10 grams, making it three sessions in a row of higher prices.
Looking at the near term, MCX’s August contracts were up 1.49%, or Rs 2,242, to Rs 1,52,770 per 10 grams on 8,948 lots. It was a change of pace from last week when they gave back 3.2% (Rs 5,066) to the Rs 1.50 lakh mark, a pullback that let some traders re-evaluate their books.
Over on Comex, August gold was also in the green, adding USD 91.04 to hit USD 4,329.84 an ounce. That 2.15% move comes after a 3% drubbing the week before. The recovery has as much to do with better risk sentiment in the wake of the peace deal news.
How to approach investing now
The word from advisers is to be disciplined, not hasty. Abhishek Bhilwaria of Bhilwaria Finserv is for sticking with your equity and gold SIPs for the sake of regular allocation, but he’d have you steer clear of putting in a big lump sum when you’re up against resistance.
His rule of thumb is to hold no more than 10-15% of your portfolio in gold and to pick up good assets on a dip. For those who like to trade, Jigar Trivedi of IndusInd Securities has some hard numbers to work with.
If you are in the market for a tactical play, here is what the experts are saying:
– Don’t let your SIPs lapse
– Leave the large lump sums for another day
– 10% to 15% is where you want to be with gold
– Accumulate on the way down, not up
Trivedi is very specific about where to make your moves. On gold, he sees a buy in the Rs 1,49,700 to Rs 1,48,800 area, with a stop loss under Rs 1,47,700 and an eye on Rs 1,51,150 to Rs 1,52,200. As for silver, he points to the Rs 2,44,400 to Rs 2,41,000 zone for entry, a stop below Rs 2,37,700, and targets in the Rs 2,51,000 to Rs 2,53,500 range.
What to watch next
You can never be sure with the geopolitical story. You have talk of an end to hostilities, Washington easing up on Tehran and the Strait of Hormuz opening up, but there are still open questions on Iran’s nuclear file that some won’t let go of.
Then there are the macro drivers. A shift in tone from the Bank of Japan, the Fed or the Bank of England could turn things around in a hurry, so everyone is watching for signs on growth and real yields.
In the end, while ETFs have made a quick buck off the headlines, the more measured investor will stick to SIPs and limits. The trader can use the levels we’ve put out here. But whether you are in one camp or the other, you can’t ignore position sizing and risk management with the kind of premium that’s in the price these days.
