With the start of the new financial year, market regulator Securities and Exchange Board of India has introduced a major change in how gold and silver ETFs are valued. The new rule, effective April 1, is expected to significantly influence portfolio valuations and improve pricing transparency.
As per a circular issued on February 26, 2026, the valuation methodology for physical gold and silver held by ETFs and mutual fund schemes will now shift to domestic pricing benchmarks.
Until now, NAV calculations relied on international benchmarks, primarily the London Bullion Market Association AM fixing prices. These were adjusted for currency exchange rates, import duties, taxes, transportation costs, and minor premiums or discounts.
Under the new framework, ETFs will use domestically discovered spot prices published by Indian exchanges such as Multi Commodity Exchange of India and National Stock Exchange of India. These prices are based on physical delivery-driven derivatives settlements, making them more aligned with India’s bullion market.
The move is widely viewed as positive. Domestic pricing is expected to improve transparency and better reflect real market conditions, reducing discrepancies between global and local prices. Investors, especially in regions like Telangana and Andhra Pradesh, where gold and silver investments are highly popular, may benefit from improved clarity and consistency. Demat account holders will also be able to track investments in line with local bullion trends.
Key highlights of the new rule:
- NAV calculations will move from LBMA benchmarks to Indian exchange-based spot prices
- Pricing will follow SEBI-guided spot polling mechanisms
- Association of Mutual Funds in India will standardise a uniform valuation policy
- Changes align with SEBI Mutual Fund Regulations, 2026
According to financial advisor Ravi Kumar, the shift will simplify ETF comparisons and improve return reliability. “Earlier, minor gaps due to international pricing created inconsistencies. The new rules will enhance stability and investor confidence,” he said.
The decision follows industry discussions and public consultations. It is also expected to improve tracking efficiency and liquidity in gold and silver ETFs.
Existing investors are not required to take any action, as the transition will be automatic. However, new investors are advised to review updated NAVs and tracking errors before investing. Experts recommend waiting briefly after implementation and monitoring performance during the initial days.
Gold and silver prices have recently declined, leading some investors to adopt a “buy the dip” strategy. Despite volatility driven by geopolitical factors, ETFs continue to remain a popular digital investment option.
With this move, SEBI aims to enhance transparency, consistency, and overall market efficiency. Investors are encouraged to consult financial advisors to assess the impact on their portfolios.
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