US Debt Buyback Plan Fuels Gold and Silver ETF Surge

Indian gold and silver exchange-traded funds (ETFs) saw significant gains on August 20, 2026, as global bullion prices surged. The increase in demand for precious metals was triggered by the US Treasury's decision to boost long-term debt buybacks, lowering bond yields and weakening the dollar.

The move is intended to improve market liquidity and control borrowing costs. However, it also had a major impact on the precious metals market, as falling long-term bond yields increased the appeal of gold and silver. The pressure on the US dollar made dollar-denominated commodities like gold and silver cheaper for international buyers, further supporting their price increase.

Silver ETFs outperformed gold in this trading session, reflecting the metal's typically higher price volatility. Tata Silver ETF saw a rise of 4.23 percent, while other major funds recorded gains between 3.8 to 4.05 percent. Gold ETFs also participated, with ICICI Prudential, Nippon India, SBI, and Tata recording gains between 2.2 and 2.4 percent.

While this rally is a positive sign for safe-haven assets, investors should remain cautious of the risks involved in this asset class. Precious metals are highly sensitive to US inflation data and Federal Reserve interest rate policies, which can lead to rapid price corrections.