Bullion Demand Surges as Investors Rotate Back to Gold and Silver ETFs Amid Global Uncertainty

Gold and Silver ETF are experiencing high volatility during the current Iran-US-Israel conflict. Initially it surged as a safe-haven asset before facing pullbacks due to a stronger US dollar and shifting interest rate expectations. The ETF pullbacks was a reflection of a catch-up adjustment to the global bullion prices due to selloffs.

Gold and Silver is caught between a rock and a hard place: on the one hand, Middle East tensions are proving some haven flows, while on the other, rising US dollar and bond yields are providing headwinds. Gold has been able to hold its ground (Support seen at $5000 an ounce) relatively well despite rising or elevated bond yields.

Surging oil prices have fueled stagflation fears (slow or no growth coupled with mounting price rises) and this triggered surge in both Gold and Silver due to the inflation fear, but complicating the price direction due to capping of the interest rate cut expectations.

Sharp moves often invite high volatility and potential pullbacks. Higher inflation would make it harder for the Federal Reserve to ease policy, though disappointing jobs numbers seemed to argue for stimulus. 

In the latest market update, investors have rotated back to the bullion pack and attracting renewed inflows while energy markets are experiencing a sudden and significant pullback. This move is a growing divergence across global commodities, a key macro signal shaping cross-asset positioning. While gold is benefitting from this renewed demand linked to macro uncertainty, inflation expectations and portfolio hedging, silver on the other hand is amplifying these shifts due to the dual role intersection between precious metals and industrial demand.

If geopolitical tensions escalate, gold could break fresh records and silver may see further spikes, sustaining ETF inflows. Gold ETFs may offer steadier returns as compared to outsized gains in Silver ETFs.

Silver and Gold ETF investors should stagger their purchases by buying on dips and partially booking profits to rebalance and maintaining the exposure to 10-15% of total portfolio. These strategies could mitigate risks from sudden reversals after safe-haven rallies. Investors should also consider AUM size, fund house credibility, and their own risk appetite while maintaining a long-term view (not a short-term trade) while investing in ETF’s as these assets act as a portfolio stabilizer during downturns of equity risk-on trades.

Among ETFs, GoldBees rallied to around 142 on 2^nd March 2026 and now trading near 132. Gold Case (Zerodha ETF) rose to 27 on 4^th March 2026  before easing to around 25. Silver ETFs have also seen a pullback, with SilverBees rising to about 276 on 2^nd March 2026 and currently trading near 256.

In the longer term, structural factors such as continued central bank gold purchases, persistent geopolitical uncertainties and high global debt levels continue to support the broader bullish outlook for gold.

Year 2026 medium term outlook - Gold could rally in COMEX and levels to surpass $5600 an ounce and a possibility of creating a milestone in rupee terms, viz, Rs.200000 per ten grams. Silver with the catch-up game could witness $95 levels an ounce and in rupee terms Rs.300000 per kilogram.