Gold and Silver ETFs Plunge Up to 7% Amid Global Market Correction

Precious Metals ETFs Decline Sharply in Early Trade

Key Figures:

• 78,617: Sensex at 09:55 am
• -1,621.9: Sensex points decline
• 2%: Sensex percentage decline
• 24,360.2: Nifty at 09:55 am
• -505.5: Nifty points decline
• 20.69: India VIX
• 20%: India VIX percentage increase
• $5,168.69: Spot gold price per ounce
• 1.6%: Spot gold price increase
• $5,300: Recent record high gold price per ounce

Market Update

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The broader market remained under pressure in early trade on Wednesday, with the Sensex down 1,621.9 points or over 2% at 78,617, and the Nifty falling 505.5 points to 24,360.2. Market breadth was weak, while volatility spiked, with the India VIX rising more than 20% to 20.69.

Precious Metals ETFs

Silver-linked ETFs saw the steepest declines, with ICICI Prudential Silver ETF falling 7.33%, Nippon India Silver ETF dropping 7.12%, SBI Silver ETF declining 7.18%, and Tata Silver ETF slipping 7.43% in early deals. Gold ETFs also traded lower, with ICICI Prudential Gold ETF falling 3.87%, Nippon India ETF Gold dropping 3.3%, SBI Gold ETF declining 3.52%, and Tata Gold ETF slipping around 3.09%.

Global Correction

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The sharp fall in domestic bullion ETFs largely reflects the steep global correction in precious metals on Tuesday, when Indian equity markets were closed for a holiday. Gold had dropped more than 4% in the previous session, hitting its lowest level in over a week as a stronger US dollar and fading expectations of near-term interest-rate cuts weighed on investor sentiment. Silver saw an even sharper decline, falling more than 8% in the same session.

Rebound in International Markets

Prices recovered partially on Wednesday as geopolitical tensions resurfaced. Spot gold rose about 1.6% to $5,168.69 per ounce, while US gold futures gained around 1.1%. Spot silver climbed about 3.5% after the previous session’s sharp drop. Safe-haven demand returned as escalating US-Israeli air strikes on Iran and broader conflict risks across the Middle East heightened global uncertainty.

Domestic Bullion Prices

Despite the rebound in international markets, domestic bullion prices remain lower after retreating from recent record highs above $5,300 per ounce. In India, the price of 24-carat gold in Delhi has fallen roughly Rs 2,800-2,900 per 10 grams, bringing prices closer to the Rs 1.67 lakh mark.

Market Analysis

Analysts say the recent volatility in precious metals reflects a tug-of-war between safe-haven demand driven by geopolitical tensions and pressure from a stronger dollar and inflation concerns linked to surging energy prices.