Gold and Silver ETFs Face Significant Declines Amid Market Pressures
Market Overview
On Monday, gold and silver exchange-traded funds (ETFs) saw notable drops, with some experiencing declines of up to 4% as prices fell on the Multi-Commodity Exchange (MCX). Analysts attribute this downturn primarily to a strong US dollar, which has impacted these dollar-priced metals. Additionally, rising energy costs have heightened inflation concerns, diminishing the chances of imminent interest rate reductions and reducing the safe-haven appeal that had been bolstered by ongoing tensions in the Middle East.
Among the gold ETFs, Nippon India Gold ETF suffered the most, falling around 4%, while Axis Gold ETF decreased by 3%. The Wealth Company Gold ETF saw a 2% dip, with other funds remaining relatively stable. Silver ETFs also encountered challenges, with Tata Silver ETF declining by approximately 3%. Both ICICI Prudential Silver ETF and Bandhan Silver ETF dropped about 2%, while other silver ETFs experienced minor declines or stable performance, as reported.
Expert Insights
Abhishek Bhilwaria from Bhilwaria MF, a registered mutual fund distributor, shared insights with a financial publication, indicating that gold and silver are currently undergoing a moderate correction after reaching record highs earlier this year. He noted that the price of 24K gold is around Rs 1,63,630 per 10 grams, while silver is priced at approximately Rs 2,84,900 per kilogram. Bhilwaria suggested that investors take advantage of these price declines by adopting a systematic investment plan (SIP) approach for gradual accumulation instead of making large one-time purchases. He recommended maintaining a balanced investment of 5–15% in precious metals to hedge against geopolitical risks and fluctuations in interest rates.
Global Market Influences
In terms of futures, MCX April 2026 gold futures fell by over Rs 1,808 (1.1%) to Rs 1,59,826 per 10 grams, while May 2026 silver futures decreased by Rs 3,538 (1.3%) to Rs 2,64,747 per kg. On the international front, spot gold prices dropped 1.7% to $5,082.51 per ounce, with US April gold futures down 1.4% at $5,099.40 per ounce. Silver prices also fell by 2.2% to $82.50 per ounce. The strengthening US dollar, which has reached its highest level in over three months, has made these metals more expensive for global buyers, leading to reduced demand.
Manoj Kumar Jain from Prithvi Finmart emphasized that gold and silver are experiencing significant volatility due to factors such as the dollar index, the US-Iran conflict, and uncertainties in the global market. He advised traders to navigate within current price ranges and suggested a buy-on-dips strategy, while long-term investors should consider gradual accumulation during price corrections.