The Bombay Stock Exchange (BSE) clarified that the revised reference price for intraday price bands of gold and silver exchange-traded funds is only applicable for today’s trading session. This adjustment comes after the BSE imposed a 20% circuit limit on these ETFs. The reference price serves as the baseline for calculating upper and lower intraday limits.
ETF prices are linked to the previous day’s net asset value (T-1 NAV) provided by mutual funds, with a 20% price band applied for trading. The BSE implemented this measure to address excessive intraday volatility and safeguard investors from drastic price fluctuations. Following a significant sell-off in precious metals markets, gold and silver prices continued to drop, reflecting profit-taking after a prolonged rally.
MCX gold February futures saw a 7.12% decline to Rs 1,39,000 per 10 grams on an intraday basis, while MCX silver March futures dropped by 9% to Rs 2,65,652 per kg. Akshat Garg, Head of Research and Product at Choice Wealth, attributed the sharp ETF declines to sentiment shifts rather than fundamental changes. Garg advised investors against panicking, emphasizing the role of precious metals as portfolio hedges and recommending a cautious approach to buying during corrections.
