BSE Limits Gold, Silver ETF Price Swings to 20% for Single Trading Session

The stock exchange said that the move applies only to the current trading session after it enforced a 20 per cent circuit limit on the gold and silver exchange‑traded funds.

"In continuation with the previous circular trading members kindly note the changes in revision in the reference price for price bands for Gold and Silver ETFs. The said reversion is applicable for today only," the BSE said in a statement.

The reference price is the baseline price from which upper and lower intraday limits (price bands) are calculated.

ETF prices will be anchored to the previous day's net asset value (T‑1 NAV) published by the respective mutual funds, and a price band of 20 per cent on either side will be applied to that baseline for trading purposes, the stock exchange has said earlier.

The measure followed a sharp sell‑off in underlying precious‑metals markets. The exchange said the step is intended to curb excessive intraday volatility and protect investors from excessive price swings.

Gold and silver prices continued their sharp decline on Sunday, as investors booked profits post an unprecedented rally over the past year.

MCX gold February futures fell 7.12 per cent to Rs 1,39,000 per 10 grams around 10 am on an intraday basis. Meanwhile MCX silver March futures dipped 9 per cent to Rs 2,65,652 per kg.

"The sharp fall in gold and silver ETFs looks scary on the screen, but it's more of a sentiment shock than a story-breaker. Precious metals had run up sharply over the last year, and what we're seeing now is a mix of profit-booking, global volatility and reaction to macro cues. ETFs tend to exaggerate moves on such days, both up and down," said Akshat Garg, Head Research and product of Choice Wealth.

Garg urged investors to avoid panic, asking them to consider precious metals as "portfolio hedges, not trading bets," and recommended staggered buying during corrections rather than chasing rallies.

- IANS