Silver and gold prices recorded a sharp decline, leading to significant losses in silver exchange-traded funds listed on the NSE. Several silver ETFs fell between 18 percent and 20 percent, while gold ETFs also remained under pressure, impacting investor sentiment.
The decline followed a sharp fall in precious metal prices on Monday, surprising investors. Silver, which had recently touched record highs, entered a phase of steep correction. The impact was directly reflected in silver ETFs managed by major fund houses including HDFC, SBI, ICICI Prudential, Kotak and Axis, all of which are listed on the NSE.
Gold ETFs under pressure
Gold, traditionally considered a safe-haven asset, also faced selling pressure. Several gold ETFs declined between 6 percent and 11 percent. On the MCX, gold prices fell by around 5 percent to Rs 1,37,390 per 10 grams, while silver dropped 6 percent to Rs 2,49,713 per kg. In global markets, gold declined by around 6 percent and silver by nearly 12 percent. From their respective record highs, gold is down about 13.5 percent and silver around 32 percent.
Extent of decline in major silver ETFs
Losses in silver ETFs were pronounced. HDFC Silver ETF declined by about 19.2 percent. Nippon India Silver ETF fell nearly 18 percent. Kotak Silver ETF, ICICI Prudential Silver ETF, SBI Silver ETF and Axis Silver ETF declined by up to 20 percent. The decline triggered selling activity as investors sought to protect gains or limit losses.
Selling pressure since Friday
The sharp decline began on Friday, when gold recorded its biggest single-day fall in over a decade and silver posted its largest single-day decline on record. The trend continued on Monday, intensifying pressure on ETFs.
US-related development adds to volatility
According to reports, the sell-off intensified after news from the United States suggesting that President Donald Trump could nominate Kevin Warsh for the post of Federal Reserve Chair. The development increased uncertainty in global financial markets, leading to simultaneous movements in the dollar, bond yields and commodity markets, which weighed on gold and silver prices.
Market caution highlighted by Zerodha founder
Zerodha Founder and CEO Nithin Kamath described the decline as a rare event, stating that in such phases markets can fall rapidly, making risk management difficult. He said that in some cases traders’ losses can exceed their invested capital. Referring to his 16 years of experience, he said he had seen a similar situation only once earlier, during the Covid period when crude oil prices turned negative.
Geojit Financial Services on current conditions
Geojit Financial Services Senior Investment Strategist Sriram B K R said the primary reason for the fall in gold and silver ETFs was the sharp decline in international prices. He said prices remain historically elevated and the near-term outlook is unclear. He added that heightened volatility has increased risk for retail investors.
