Silver and gold ETFs slide up to 3.6 percent on global cues

Precious-metal ETFs in India came under sharp selling pressure on Monday, with silver funds falling as much as 3.6 percent and gold funds losing more than 2 percent as global bullion prices slid on renewed fears of further US Federal Reserve rate hikes.

Silver ETFs lead the decline

Gold and silver exchange-traded funds tracked a steep fall in precious metal prices after rising crude oil prices fuelled inflation concerns and strengthened expectations of additional interest-rate increases by the US Federal Reserve.

Silver ETFs bore the brunt of the selling, with losses of up to 3.6 percent, while gold ETFs dropped more than 2 percent.

SBI Silver ETF was the biggest loser among the major precious-metal ETFs, falling 3.59 percent to Rs 216.23.

Nippon India Silver ETF declined 3.57 percent to Rs 210.99.

Tata Silver Exchange Traded Fund slipped 3.51 percent to Rs 21.43.

ICICI Prudential Silver ETF was down 3.44 percent at Rs 220.49.

The fall in silver ETFs came during a broader risk-off move in Indian equities, with the Sensex crashing 975 points, or 1.3 percent, at 72,920 at 12:10 pm.

The Nifty also fell 310 points to 22,830 at 12:10 pm.

Gold ETFs trade firmly in the red

Gold ETFs also traded firmly in negative territory as the pressure in international bullion markets fed into domestic precious-metal products.

ICICI Prudential Gold ETF fell 2.64 percent to Rs 125.63.

SBI Gold ETF declined 2.55 percent to Rs 125.16.

Nippon India ETF Gold BeES dropped 2.45 percent to Rs 121.38.

Tata Gold Exchange Traded Fund was down 2.26 percent at Rs 14.29.

The losses in these ETFs mirrored a sharp correction in international bullion markets.

For investors tracking gold rate today through exchange-traded products, the movement showed how quickly global bullion weakness can be reflected in listed domestic ETF prices.

The selling pressure also showed that silver-linked products were hit harder than gold-linked products in the session covered by the data.

International bullion prices slide

Spot gold fell 2.1 percent to $4,198.10 an ounce.

Spot gold was on course for its biggest daily decline since September 1.

US gold futures dropped 2.1 percent to $4,231.

Spot silver suffered a steeper fall than gold, losing 3.4 percent to $62.08 an ounce.

The international correction was broad enough to affect both spot prices and futures linked to gold.

It also affected silver more sharply than gold in the quoted spot market moves.

The pressure was not limited to gold and silver.

Spot platinum fell 2.7 percent to $1,730.78 an ounce.

Palladium declined 2.8 percent to $1,231.46.

These moves reflected a broad-based sell-off across precious metals.

MCX gold and silver futures also weaken

Domestic commodity markets reflected the same pressure seen in global bullion.

MCX silver futures for September 2026 delivery plunged Rs 6,661 to Rs 2,28,035 per kg.

October 2026 gold futures declined Rs 3,214 to Rs 1,47,667 per 10 grams.

The domestic futures moves were reported alongside the fall in spot gold, US gold futures and spot silver.

The sharp fall in MCX silver futures was consistent with the heavier pressure seen in silver ETFs and spot silver.

Gold futures on MCX also declined, matching the weaker trend seen in gold ETFs and international gold prices.

Crude oil, inflation concerns and Fed expectations

The sell-off in precious metals came as crude oil prices climbed after US President Donald Trump rejected an Iranian proposal aimed at ending the conflict and reopening the Strait of Hormuz.

Brent crude futures jumped $3.43, or 3.29 percent, to $107.75 a barrel.

The rise in crude kept concerns over energy-driven inflation elevated.

Higher inflation expectations increased concerns that the Fed may have to tighten monetary policy further.

The Federal Reserve raised its target rate by 25 basis points earlier this month to 3.75-4 percent.

Traders are now pricing in a 68 percent probability of another US rate hike in October, Reuters reported citing CME's FedWatch Tool.

Higher interest rates typically weigh on non-yielding assets such as gold and silver by raising the opportunity cost of holding them.

That rate-sensitive dynamic helps explain why gold and silver came under pressure even as crude oil strengthened.

Dollar and bond-yield backdrop

The dollar was under some pressure on Monday.

Even so, the dollar remained near a two-month high as the US-Iran conflict continued to push oil prices and bond yields higher.

The combination of oil-price strength, elevated bond yields and expectations of further US rate hikes formed the macro backdrop for the decline in precious metals.

The weakness in ETFs, spot prices and MCX futures therefore reflected both global bullion selling and domestic market reaction.

Why the move matters

Gold and silver are widely tracked as precious metals, but they do not offer yields in the way interest-bearing assets do.

When interest rates rise, the opportunity cost of holding non-yielding assets such as gold and silver also rises.

That is why expectations of further US Federal Reserve tightening can weigh on bullion and on products linked to bullion prices.

The ETF declines also matter because they show listed market products moving in line with international bullion and domestic commodity markets.

Silver-linked ETFs saw deeper falls than gold-linked ETFs, which matched the steeper fall in spot silver compared with spot gold.

The broader market backdrop was also weak, with the Sensex and Nifty both falling sharply at 12:10 pm.

In that environment, precious-metal ETFs were part of a larger risk-off move rather than an isolated fall in one product category.

The source report said Moneycontrol advises users to check with certified experts before taking any investment decisions.