Silver ETF Rally Hits 4% as Weaker Dollar Boosts Precious Metals
Silver exchange-traded funds (ETFs) surged over 4% on August 20 as global and domestic silver prices rebounded. The rally was driven by a weaker US dollar, lower US Treasury yields, and renewed buying in precious metals.
The COMEX silver futures price rose 1.38% to $66.73 per ounce, while the LBMA spot silver price stood at $63.36 per ounce on August 19. The domestic MCX silver price hovered at Rs 2,48,424 lakh per kg.
Tata Silver ETF led the pack with a 4.33% rise, followed by HDFC and DSP Silver ETFs. Nirpendra Yadav, Sr. Research Analyst at Bonanza, attributed the rally to the decline in US Treasury yields, which reduced the opportunity cost of holding non-yielding precious metals.
However, Yadav cautioned that investors should be cautious when buying silver ETFs following today's sharp intraday surge, as Indian silver ETFs can sometimes move more sharply than the underlying metal. He advised staggered accumulation on corrections rather than a lump-sum purchase after today's over 4% surge.