Silver ETFs Plunge Amid Metal Correction as Gold Drops, While Equity Markets Hold Steady

Silver ETFs Plunge Amid Metal Correction as Gold Drops, While Equity Markets Hold Steady​

Precious Metals Face Sharp Decline as Bullion Prices Slip Globally​

Gold and silver exchange-traded funds (ETFs) experienced a marked correction in morning trade on June 25, tracking significant weakness across domestic and global bullion markets. The decline was pronounced among precious metals investors, with Silver ETFs facing the steepest losses of the day. Gold ETFs also registered notable drops as market sentiment shifted against non-yielding assets.

Silver ETFs were particularly vulnerable to the ongoing metal correction, with some funds declining by nearly 4 percent. This movement mirrors a sharp pullback in silver futures trading. Meanwhile, gold-backed funds saw their values decline by approximately 2 percent, confirming the broader trend of caution regarding hard commodities.

Domestic Bullion Markets Witness Correction in Precious Metal Values​

The weakness extended to exchanges like the Multi Commodity Exchange (MCX). In the morning trade, MCX silver futures fell 0.96 percent, trading at Rs 2,11,710 per kg. Concurrently, MCX gold futures for August delivery registered a minor decline of 0.16 percent at Rs 1,41,220 per 10 grams.

Silver witnessed extreme volatility during the opening bell on domestic markets. The July silver futures contract initially plunged by nearly Rs 3,000 to around Rs 2.10 lakh per kg, which is roughly half of the record high of Rs 4.20 lakh per kg touched in January. Despite a swift recovery to trade above Rs 2.15 lakh per kg within minutes, silver prices have fallen by approximately Rs 17,000 per kg over the first four trading sessions of the week.

Gold ETF Losses Mirror International Pressures​

Gold ETFs mirrored the prevailing global trend of weakening gold prospects. Globally, spot gold extended its losses after breaking below the critical $4,000-an-ounce mark for the first time in seven months during a previous session. This decline is attributed to sustained pressure from international factors.

The metal faced headwinds as the US dollar maintained strength. Investors significantly increased their bets that the US Federal Reserve could raise interest rates this year to combat persistent inflation, diminishing the attractiveness of assets like gold. The domestic figures reflected this trend, with several key ETFs reporting losses below 2 percent.

Specific ETF Performance and Market Context​

At around 10:45 am, multiple silver-backed funds recorded steep drops. Nippon India Silver ETF (SilverBeES) was down 3.81 percent at Rs 205.23. SBI Silver ETF fell 3.76 percent to Rs 210.25, while ICICI Prudential Silver ETF declined 3.78 percent to Rs 214.05 and Tata Silver ETF slipped 3.74 percent to Rs 20.85.

Among gold-backed funds, the average decline was around 2 percent across the major ETFs. ICICI Prudential Gold ETF dropped 1.94 percent to Rs 119.23. SBI Gold ETF declined 1.92 percent to Rs 118.91, and Nippon India ETF Gold BeES fell 1.86 percent at Rs 115.37. Tata Gold ETF was down 1.81 percent at Rs 13.57.

Equity Markets Remain Firm Despite Metal Downturn​

In contrast to the volatility in precious metals, the broader equity market demonstrated resilience. At around 10:45 am, the Sensex stood firm, up 542.78 points or 0.70 percent, trading at 77,534.00. The Nifty 50 also gained ground, rising 153.00 points or 0.64 percent to reach 24,174.65.