Global price corrections have sent shockwaves through the precious metals market, resulting in significant declines in silver and gold ETFs. Silver ETFs have experienced substantial losses, sinking up to 15%, while gold ETFs have fallen over 3%.
The downturn follows a period of exceptional gains for both metals. Spot gold prices had risen 96% in the 12 months leading up to January 28, 2026, while silver's spot price soared 278% during the same period. This impressive rally, fueled by geopolitical tensions, economic uncertainty, and inflation concerns, propelled gold to a high of nearly $5,600 per ounce and silver to $121.64 an ounce.
However, market sentiment shifted dramatically, triggering a wave of profit-taking and long liquidation. Several factors contributed to the correction. A stronger US dollar and rising US Treasury yields increased the opportunity cost of holding non-interest-bearing assets like gold and silver. The dollar's strength makes commodities more expensive for global buyers, further dampening demand. Comments from US President Donald Trump regarding his nominee for the next Federal Reserve Chair, Kevin Warsh, also added to market jitters. Warsh is known for his hawkish stance on interest rates, and the expectation of tighter monetary policy typically weakens precious metal prices. The CME Group's decision to increase margin requirements for metal futures also contributed to the downward pressure.
The sudden price plunge led to significant losses for investors in gold and silver ETFs. Indian Silver ETFs, in particular, experienced sharp declines, with most falling between 15% and 20%. Nippon AMC Silver BEES, for example, ended a recent session 18.6% lower. Similarly, other Silver ETFs offered by fund houses like ICICI Prudential and Zerodha saw steep declines.
The recent volatility highlights the sensitivity of precious metals to shifts in liquidity, positioning, and broader risk sentiment. According to Suki Cooper, who leads the global commodities research team at Standard Chartered, the massive selloff wasn't surprising, as both metals were trading in "aggressively overbought territory" in early 2026 and were due for a correction. Some analysts believe that this correction represents a "cooling off" period, squeezing out highly leveraged speculative capital and allowing prices to return to a healthier trajectory.
Despite the recent downturn, some experts believe the long-term outlook for gold remains positive, citing its role as a safe-haven asset and a hedge against inflation. Silver, however, is considered more vulnerable due to its dual role as a precious and industrial metal. Approximately 50% of global demand for silver comes from industrial applications like electric vehicles and 5G technology.
Following the sharp decline, gold and silver ETFs rebounded, rising by over 15%. MCX silver futures for March 5 surged 6%, while gold futures for April 2 delivery climbed 3%. This recovery was supported by fresh buying at lower levels. Fund managers advise investors not to panic and to understand the reasons behind the price movements, emphasizing that the underlying fundamentals for gold and silver remain intact.