Gold and silver exchange traded funds staged a strong comeback on January 23, rising up to 10 percent after a sharp correction in the previous session. The recovery tracked an extraordinary surge in underlying precious metal prices, with both gold and silver futures on the Multi Commodity Exchange (MCX) touching fresh lifetime highs.

The rebound is significant because it follows a violent two-day swing in investor positioning. On the previous day, ETFs linked to gold and silver had fallen sharply as concerns around fresh US tariffs eased temporarily. However, renewed geopolitical uncertainty and currency weakness have quickly reversed sentiment, pulling investors back into safe-haven assets.

On MCX, gold futures for February expiry surged to a fresh all-time high of Rs 1,59,226 per 10 grams. The April and June contracts also touched lifetime highs at Rs 1,68,000 and Rs 1,73,676 per 10 grams respectively. Silver futures followed a similar trajectory, with the March contract hitting a record Rs 3,39,927 per kilogram after falling nearly 4 percent in the previous session. Contracts for later expiries were also at peak levels.

The rally was not restricted to domestic markets. COMEX gold approached the $5,000 per ounce mark while silver neared $100 per ounce, indicating that this was a global move rather than a localized spike. The trigger was a combination of geopolitical tension surrounding the Greenland issue and persistent weakness in the US dollar.

Although US President Donald Trump stepped back from immediate tariff threats against European Union nations as part of his push related to Greenland, uncertainty around the “framework” of a potential deal has kept markets on edge. Reports from Dow Jones, Bloomberg and Reuters indicated that European leaders remain cautious and wary, even as they signal willingness to restart trade talks with the US.

At a summit on Thursday, European Union leaders discussed restoring EU-US trade engagement after the European Parliament had earlier suspended ratification amid tariff threats. However, statements from EU officials suggested that trust in transatlantic relations has been dented, and the bloc is prepared to respond if new threats emerge.

This lingering geopolitical unease has revived safe-haven buying globally. At the same time, the US dollar posted its worst week in nearly a year after declining sharply in US trade. A weaker dollar typically boosts demand for dollar-denominated commodities such as gold and silver, as they become cheaper for holders of other currencies.

These global signals translated quickly into Indian ETF flows.

Among gold ETFs, Groww Gold ETF, Invesco India Gold ETF, Motilal Oswal Gold ETF and Axis Gold ETF rose around 4 percent. 360 ONE Gold ETF, Bandhan Gold ETF, Tata Gold ETF, Angel One Gold ETF, Zerodha Gold ETF, Quantum Gold ETF, ICICI Prudential Gold ETF, Edelweiss Gold ETF and Union Gold ETF gained more than 3 percent. LIC Mutual Fund Gold ETF, Nippon Gold ETF, Nippon India ETF Gold Bees and HDFC Gold ETF also posted gains of around 3 percent.

Silver ETFs saw even sharper moves. 360 ONE Silver ETF jumped more than 10 percent, emerging as the top gainer. Tata Silver ETF, which had fallen as much as 24 percent in the previous session, rebounded 9 percent. Mirae Asset Silver ETF, Axis Silver ETF, Edelweiss Silver ETF, Aditya Birla Sun Life Silver ETF, DSP Silver ETF and ICICI Prudential Silver ETF gained around 9 percent. Nippon India Silver ETF, HDFC Silver ETF and Zerodha Silver ETF were up more than 8 percent.

For Indian investors, this episode highlights how commodity ETFs are increasingly behaving like high-volatility macro instruments rather than passive gold proxies. Price swings are being driven less by traditional jewellery demand or festival buying and more by global geopolitics, currency moves and risk sentiment.

The sharp move in ETFs is likely to drive renewed retail and HNI interest in gold and silver ETFs as tactical safe-haven allocations. Higher MCX prices may also influence domestic bullion rates and import dynamics if the rally sustains.