Gold, silver ETFs jump up to 4% as MCX, NSE remove extra margins

Gold and silver exchange traded funds (ETFs) traded higher on Wednesday, tracking gains in domestic bullion prices after exchanges withdrew additional margin requirements on precious metals contracts. Silver ETFs rose up to 4.2% during the session, while gold ETFs edged up around 0.30%, even as a firm U.S. dollar capped sharper gains.

In a boost for traders, the Multi Commodity Exchange (MCX) and the National Stock Exchange of India (NSE) removed the additional margins imposed earlier on gold and silver futures. The 3% extra margin on gold futures and 7% on silver futures were withdrawn with effect from February 19 after prices cooled in recent weeks. The move is expected to improve liquidity and trading participation in bullion contracts.

The recovery in bullion comes even as the US dollar strengthened to a more than one-week high ahead of key US inflation data. A stronger dollar typically makes gold and silver more expensive for overseas buyers, limiting gains.

Gold, Silver edge higher on MCX

On MCX, gold futures for April 2 expiry were trading near ₹1,56,130 per 10 grams, up ₹369 or 0.24% from the previous close. Silver futures for April 30 expiry quoted around ₹2,48,550 per kg, rising about 0.40%. MCX Silver Mini contracts were trading at ₹2,39,998 per kg, up 4.20%.

In the physical market, 24K gold was priced near ₹15,649 per gram (₹1,56,490 per 10 grams), up about 0.29%, while 22K gold traded at ₹14,345 per gram. Despite the rebound, gold remains in a consolidation phase after correcting from record highs above ₹1,80,000 earlier this year. So far in February, prices are down around 2.55%.

Silver has seen sharper swings. Physical silver was quoted near ₹254.90 per gram (₹2,54,900 per kg), nearly 27% below its February 1 peak of ₹3,50,000/kg, after touching record highs of ₹4,10,000/kg in January.

Volatility high, long-term trend intact, say analysts

Market experts say volatility is likely to persist, but the broader bullish structure for precious metals remains intact.

Jateen Trivedi, VP Research Analyst – Commodity and Currency at LKP Securities, said gold has rebounded after finding support near $4,850 on CME, but the short-term structure still shows weakness.

“A decisive break above $5,000 on CME would be required to negate the short-term weakness and revive bullish momentum,” he said. He added that the Fed’s meeting minutes and China’s market reopening could add to volatility. On MCX, support is seen near ₹1,48,000 and resistance around ₹1,55,000.

Gaurav Garg, Research Analyst at Lemonn Markets Desk, said near-term sentiment remains cautious amid a firm US dollar and uncertainty over the US Federal Reserve’s policy outlook.

However, he noted that safe-haven demand and steady central bank buying continue to support prices on dips. “The current move appears to be consolidation within a broader corrective phase rather than a breakdown of the long-term bullish trend,” he said, advising staggered buying for investors while urging traders to stay cautious.

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