Oil Price Decline Trumps Fed Rate Hike for Gold and Silver ETFs

Gold and silver ETFs rose by 2-3% on Friday as investors shrugged off the US Federal Reserve's rate hike and instead focused on declining oil prices.

The Fed raised rates by 25 basis points for the first time in three years, but analysts believe this move has been largely discounted by the market. Meanwhile, Brent crude futures fell 0.75% to $104 a barrel amid easing concerns over Saudi supply disruptions.

As a result, gold and silver ETFs gained traction, with silver emerging as the biggest beneficiary. Silver ETFs such as Kotak Silver ETF, Tata Silver ETF, UTI Silver ETF, DSP Silver ETF, Zerodha Silver ETF, HDFC Silver ETF, and Bandhan Silver ETF rose over 3% each.

Gold ETFs also saw gains, with Axis Mutual Fund ETF, Choice Gold ETF, Angel One Gold ETF, and others such as Zerodha Gold ETF and Nippon India ETF Gold BeEs gaining nearly 2% each. According to Harshal Dasani, business head at INVasset PMS, the rise in gold and silver ETFs is largely a reflection of the underlying move in bullion rather than a change in ETF fundamentals.