Investors reeled from a savage precious metals downturn on Friday, as plummeting gold and silver prices inflicted up to 24% losses on ETFs. The cascade began in spot markets but quickly engulfed funds, underscoring the sector’s vulnerability to sudden sentiment shifts.
Gold ETFs bore the brunt with Nippon India ETF Gold BeES and ICICI Prudential Gold ETF each down 10%, Axis Gold ETF slumping 12%. Tata Gold ETF, HDFC Gold ETF, and UTI Gold ETF mirrored the weakness. Silver ETFs collapsed further: Axis Silver ETF by 24%, ICICI Prudential and Kotak Silver ETFs by 23%, SBI Silver ETF by 22%, and Mirai Asset, HDFC, and Nippon India Silver ETFs with comparable devastation.
Domestic benchmarks confirmed the rout—India Bullion Jewellers Association reported 24-carat gold at 1,65,795 per 10 grams after a 9,545-rupee drop in 24 hours. Silver settled at 3,39,350 per kg, minus 40,638 rupees from 3,79,988/kg.
Overseas, Comex gold eased 3.84% to 5,150 USD/oz, silver tanked 10.56% to 102.34 USD/oz. Analysts point to US Treasury yield spikes, dollar rally, and technical selling as culprits, with reduced bets on rate cuts adding pressure.
For ETF holders, this volatility test underscores risk management needs. While some see value emerging at current levels, caution prevails until clarity emerges from global economic calendars.