Nippon India ETF Gold BeES witnessed a sharp sell-off on Budget day, with the ETF falling 16.81% to trade near Rs 121.90 on the NSE. The steep decline mirrors the sharp fall in domestic gold prices, after gold futures on MCX hit a 9% lower circuit, triggering panic selling across gold-linked instruments, including ETFs.
Gold prices came under intense pressure due to a combination of aggressive profit booking, margin-related stress, and liquidity constraints in the commodity market. After a strong rally in recent months, traders rushed to exit positions as volatility spiked during the Union Budget session. The impact was amplified by MCX clearing norms, where pay-in and pay-out obligations were deferred due to Budget-day trading, tightening available margins for participants.
In addition, a stronger global risk-off move and sharp corrections in international precious metals added to the pressure. As gold futures slipped sharply within minutes of opening, ETFs tracking physical gold prices reflected the decline almost immediately.
The sharp fall in Gold BeES highlights how commodity price shocks directly transmit to ETFs, especially during high-volatility events such as the Union Budget, when trading volumes surge and leverage unwinds rapidly.
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