Gold and Silver ETFs Witness Sharp Sell-Off
Investors in precious metals faced a rough trading session on Thursday as Gold and Silver Exchange Traded Funds (ETFs) posted sharp losses following a steep correction in domestic and international bullion prices.
Silver ETFs emerged as the biggest losers, falling nearly 4%, while Gold ETFs slipped around 2% during morning trade, reflecting heightened volatility across the precious metals market.
Silver ETFs Lead the Decline
Around 10:45 AM, several Silver ETFs recorded significant losses.
Silver ETF Performance
| ETF | Decline | Price |
|---|---|---|
| Nippon India Silver ETF (SilverBeES) | -3.81% | ₹205.23 |
| SBI Silver ETF | -3.76% | ₹210.25 |
| ICICI Prudential Silver ETF | -3.78% | ₹214.05 |
| Tata Silver ETF | -3.74% | ₹20.85 |
The correction came after silver futures witnessed heavy selling pressure on the Multi Commodity Exchange (MCX).
Gold ETFs Also Under Pressure
Gold-backed ETFs also traded lower as investors booked profits amid weakness in bullion prices.
Gold ETF Performance
| ETF | Decline | Price |
|---|---|---|
| ICICI Prudential Gold ETF | -1.94% | ₹119.23 |
| SBI Gold ETF | -1.92% | ₹118.91 |
| Nippon India Gold BeES | -1.86% | ₹115.37 |
| Tata Gold ETF | -1.81% | ₹13.57 |
The decline tracked the weakness seen in domestic gold futures and global spot gold prices.
MCX Gold and Silver Prices Correct
The fall in ETF prices mirrored losses in bullion futures traded on the Multi Commodity Exchange (MCX).
During morning trade:
- MCX Gold August Futures slipped 0.16% to ₹1,41,220 per 10 grams.
- MCX Silver Futures declined 0.96% to ₹2,11,710 per kilogram.
Although both metals recovered partially from intraday lows, prices remained significantly below last week’s levels.
Silver Sees Extreme Volatility
Silver experienced sharp price swings immediately after the market opened.
The July futures contract initially dropped by nearly ₹3,000 per kilogram, touching around ₹2.10 lakh per kg, before recovering above ₹2.15 lakh per kg within minutes.
Despite the rebound, silver has corrected by nearly ₹17,000 per kilogram during the first four trading sessions of the week.
Gold Prices Fall Below Recent Highs
Gold futures also opened sharply lower.
The August contract slipped to an intraday low of ₹1,40,543 per 10 grams before recovering close to ₹1,42,000.
Even after the recovery, gold prices remain approximately ₹5,200 per 10 grams below last Friday’s closing levels.
Why Are Gold and Silver Prices Falling?
The latest correction is largely driven by weakness in global bullion markets.
International gold prices came under pressure after spot gold dropped below the $4,000 per ounce mark for the first time in seven months.
A stronger US dollar and growing expectations that the US Federal Reserve could raise interest rates again to tackle persistent inflation have reduced investor demand for non-yielding assets such as gold.
Higher interest rates typically increase the attractiveness of fixed-income investments while reducing the appeal of precious metals.
Equity Markets Remain Strong
Despite the sharp decline in bullion prices, Indian equity markets traded firmly in positive territory.
At around 10:45 AM:
- Sensex gained 542.78 points (0.70%) to 77,534.00.
- Nifty 50 rose 153 points (0.64%) to 24,174.65.
The divergence suggests investors shifted preference toward equities while precious metals remained under selling pressure.
What Should Investors Watch?
Market experts believe volatility in gold and silver may continue as investors closely monitor:
- US Federal Reserve policy outlook
- Inflation data
- US Dollar movement
- Global geopolitical developments
- International bullion demand
Long-term investors are advised to avoid making investment decisions based solely on short-term price movements and should consult financial advisors before making allocation changes.
