Gold and silver ETFs fell on talk of a duty cut
Funds dropped as much as 2.3 percent on Thursday. Global prices barely moved.
Gold and silver exchange-traded funds in India fell as much as 2.3 percent on Thursday, even as global prices held almost still.
The Economic Times said gold ETFs closed down 1.3 to 2.3 percent. Silver ETFs fell 1.2 to 2.3 percent. Nippon India ETF Gold BeES, the largest gold fund by assets, dropped 1.75 percent. Nippon India Silver ETF fell 1.6 percent. International spot gold was about $4,594 an ounce. Silver was up 0.1 percent at $68.18.
Anindya Banerjee of Kotak Securities said the gap between Indian and global prices came from investors pricing in a cut to import duty. The duty is 15 percent. He said it may not go all the way back to 6 percent, but even a partial cut would weigh on local prices. "This expectation led to selling pressure last night as well as on Thursday," he said.
Apurva Sheth of Samco Securities said the duties were put on a couple of months ago during rupee weakness, and that the government may now look at rolling them back.
A duty cut would make gold and silver cheaper in India even if London and New York do not move. ETFs track domestic prices, so they moved first.
The funds had been having a good year. Gold BeES is still up 18.1 percent in 2026, and 9.6 percent in the past month. The silver fund is up 5.1 percent this year.
The test is whether the government actually cuts the duty, and by how much. Until then the funds will trade the rumour.