ETFs suffer steep losses—Silver down 20%, Gold up to 11%—as global metals crash triggers rare risk events and investor caution.
A historic plunge in gold and silver prices has triggered a fresh rout in exchange-traded funds (ETFs), with investors witnessing one of the sharpest selloffs in over a decade. Silver ETFs fell as much as 20%, while gold ETFs slid between 6% and 11% on Monday, tracking a deepening correction in global and domestic bullion markets.
Third Straight Day of Losses for Precious Metals
In global markets, spot gold fell 6%, while silver slumped nearly 11.8%. From their record peaks, the two metals have dropped 13.5% (gold) and a stunning 32% (silver). Domestically, the trend mirrored global cues:
- MCX gold futures for March delivery dropped 5% to ₹1,37,390 per 10 grams.
- MCX silver futures tumbled 6% to ₹2,49,713 per kg.
Is this a correction or the beginning of a longer unwind in one of the most resilient asset classes of the past year?
Silver ETFs Hit Hardest
Silver ETFs bore the brunt of the downturn on the National Stock Exchange (NSE):
- Kotak, ICICI Prudential, SBI, and Axis Silver ETFs fell 20% each.
- HDFC Silver ETF lost 19.2%, while Nippon India Silver ETF dropped 18%.
The sudden collapse followed the largest-ever intraday loss in silver on Friday, marking an event that investors and strategists called “rare.”
“In 16 years, I’ve only seen this once before—when crude went negative,” said Nithin Kamath, Zerodha CEO, citing a breakdown in risk management.
Gold ETFs Follow Suit
While less extreme than silver, gold ETFs also faced significant drawdowns:
- Aditya Birla Sun Life Gold ETF fell 10.5%, and Tata Gold ETF dropped 7.8%.
- Axis, Nippon, LIC MF, and DSP Gold ETFs lost between 6% and 8%.
The market jitters were partly triggered by reports that former Fed governor Kevin Warsh could be nominated as the next US Federal Reserve Chair—an event seen as catalyzing the selloff.
Strategic View: Not the Time to Chase Rallies
According to Sriram B K R of Geojit Financial Services, the ETF declines are largely a reflection of international price shocks. He noted that while prices remain “elevated,” fundamentals no longer offer a clear direction.
- “Both asset classes appear due for a price consolidation,” he said.
- Global uncertainty may keep gold supported, but investors should avoid chasing rallies.
Is the worst over—or does the velocity of this drop hint at a broader repricing of safe-haven assets?
TL;DR:
Silver and gold ETFs plunged sharply Monday as metal prices crashed globally—silver by 32% from highs, gold by 13.5%. Silver ETFs fell up to 20%, gold ETFs up to 11%. Zerodha’s CEO called the volatility a rare event, advising caution amid mixed fundamentals.
AI Summary in Points:
- Silver ETFs fell 18–20%; gold ETFs down 6–11%
- Spot silver dropped 11.8%, gold fell 6% globally
- MCX futures saw silver at ₹2.49 lakh/kg, gold at ₹1.37 lakh/10g
- Zerodha CEO likens crash to crude’s 2020 collapse
- Experts urge disciplined asset allocation, warn against chasing rallies
