Silver ETFs plunged over 6% as bullion prices corrected sharply.
Gold ETFs fell 2-3% amid weakness in precious metals.
Stronger dollar and shifting risk sentiment pressured gold and silver.
Gold, Silver ETFs Sink As Precious Metals Selloff Deepens; Silver Funds Drop Over 6%
Sharp fall in global bullion prices weighs on domestic ETFs, with silver underperforming gold amid rising market volatility
Summary
Advertisement
Investors in precious metal exchange-traded funds (ETFs) faced sharp losses on Monday as a steep decline in gold and silver prices triggered a selloff across bullion-linked funds.
Silver ETFs emerged as the worst performers, falling more than 6%, while most gold ETFs declined between 2% and 3%.
Among gold-focused funds, Axis Gold ETF fell over 3%, while Nippon India ETF Gold BeES, SBI Gold ETF, HDFC Gold ETF and ICICI Prudential Gold ETF declined between 2.5% and 2.7%.
The correction was more severe in silver-linked products. HDFC Silver ETF dropped 6.42%, while Nippon India Silver ETF, ICICI Prudential Silver ETF, SBI Silver ETF and Tata Silver ETF each fell more than 6%.
Precious Metals Under Pressure
The decline followed a sharp correction in bullion prices during the previous trading session.
According to Choice Broking, MCX Gold dropped nearly 3,500 points on Friday and opened lower again on Monday, indicating continued weakness in the near term.
Advertisement
Analysts noted that gold is currently trading below key short-term and medium-term moving averages, signalling a moderately bearish trend. However, prices remain above major long-term support levels.
Silver witnessed even stronger selling pressure. The metal had hit a lower circuit of nearly 6% on Friday and extended losses at the start of Monday's session.
Market experts said the Gold-Silver ratio has climbed above 63:1, indicating that silver is significantly underperforming gold.
Analysts believe silver could remain under pressure unless clear reversal signals emerge in the commodity market.
Why Precious Metals Are Falling
The selloff comes amid changing global risk sentiment and renewed volatility across commodity markets.
Rising crude oil prices, a stronger US dollar and fading expectations of a peace agreement between the United States and Iran have weighed on precious metals.
A firmer dollar typically makes gold and silver more expensive for holders of other currencies, reducing demand and pressuring prices.
Advertisement
The shift in investor positioning has led to broad-based weakness across bullion markets, which has directly impacted returns from gold and silver ETFs.