loading
loading
Gold and silver exchange-traded funds (ETFs) came under pressure on Friday, with silver ETFs declining more sharply than their gold counterparts. The fall mirrors weakness in the underlying precious metals as investors reassess expectations around the US Federal Reserve’s interest-rate path. Among gold ETFs, Invesco India Gold was the biggest decliner, falling 1.01%, while SBI Gold, Axis Gold, HDFC Gold and ICICI Prudential Gold also traded lower. Nippon India Gold BeES, one of the most actively traded gold ETFs, declined 0.75% to ₹125.25. Silver ETFs saw a steeper correction. ICICI Prudential Silver ETF fell as much as 3.09% to ₹226.47, while another quote showed the fund down 3%. The decline in precious metals has been driven by a combination of higher US interest-rate expectations and rising Treasury yields. Stronger-than-expected US producer-price data has increased bets that the Federal Reserve could maintain a tighter monetary policy stance. Higher interest rates typically weigh on gold and silver because these assets do not generate interest income, making them relatively less attractive when bond yields rise. Silver has faced additional pressure from weakness in global prices. Spot silver was headed for a weekly decline of around 4%, while gold was on track for its third straight weekly fall. Investors are now closely watching US consumer inflation data, which could influence expectations for the Fed’s next policy move and provide fresh direction to precious metals. Tushar Badjate, Director at Badjate Stock & Shares Pvt Ltd, said gold and silver have come under pressure as expectations of a US Federal Reserve rate hike at the 16 September meeting have risen sharply this week, with the odds hovering around 50–60% following hotter-than-expected PPI data. He noted that a firmer US dollar and rising bond yields have made non-yielding precious metals less attractive. “Silver is falling more sharply as its industrial demand makes it more sensitive to macroeconomic swings, while futures positioning remains heavily skewed towards long positions at around 228,000 net contracts, leaving room for a sharper unwind,” Badjate said. He expects volatility to remain elevated ahead of the Fed decision, adding that a hawkish surprise could extend the decline, while a hold or dovish tone could trigger a quick reversal. “Positioning ahead of the outcome looks more sensible than reacting to the move itself,” he said. Nirpendra Yadav, Sr. Research Analyst at Bonanza, said the more than 1% decline in gold ETFs and up to 3% fall in silver ETFs is primarily a macro-driven correction rather than a fundamental breakdown in the precious-metals story. He said rising oil prices have emerged as the biggest headwind, with Brent crude moving towards $110 a barrel amid escalating Middle East tensions and supply concerns. Higher oil prices are fuelling inflation expectations and reducing expectations of easier US monetary policy. Market pricing is now reportedly indicating around a 70% probability of a Fed rate hike. “US Treasury yields have also jumped sharply, with the 10-year yield approaching 5%, making interest-bearing assets more attractive compared with non-yielding gold,” Yadav said. He added that a stronger dollar, with the dollar index around 99, is further weighing on dollar-denominated precious metals. According to Yadav, silver is seeing a sharper correction because it is a higher-beta metal with both monetary and industrial demand. After its strong rally, profit-taking can be more pronounced, particularly in the relatively smaller and less liquid silver market. Gold ETFs attracted ₹2,596.70 crore in August, marking a nearly 67% month-on-month increase from ₹1,558.75 crore in July, based on data from the Association of Mutual Funds in India (AMFI). Silver ETFs also saw strong investor interest, recording inflows of ₹1,270.63 crore during the month. Combined, gold and silver ETFs attracted around ₹3,867 crore in August. Overall, ETFs recorded inflows of ₹10,160.87 crore during the month. Equity ETFs accounted for ₹7,237.49 crore of the inflows, while debt ETFs witnessed outflows of ₹944.97 crore. Ponmudi R, CEO of Enrich Money, said MCX Gold opened with a sharp gap down and is testing the ₹150,700– ₹150,000 support zone, around the 100-day EMA, after falling 0.98%, mirroring COMEX gold’s decline to a one-week low. Immediate resistance is placed at ₹152,500, with a sustained move above this level opening the way towards ₹154,000– ₹154,700. On the downside, support is seen at ₹150,700– ₹150,000, followed by ₹148,000– ₹147,300. He noted that the RSI near 44, below the neutral 50 mark, indicates weak momentum. “Domestic gold remains under pressure from the oil-driven inflation scare, while the rupee’s weakness is providing only a partial offset,” Ponmudi said. He added that the bias remains cautiously negative below ₹152,500, with a break below ₹150,000 potentially dragging prices towards ₹148,000. On MCX Silver, Ponmudi said the contract opened sharply lower and was trading below the ₹232,000 resistance zone, down 1.40%, underperforming gold. Immediate resistance is at ₹232,000– ₹233,000, while a break above this range could take silver towards ₹236,000– ₹237,000. Support is placed at ₹230,000– ₹229,000, followed by ₹226,000– ₹225,000. “RSI near 44 remains weak and falling, confirming that silver is the softer leg of the metals complex,” he said. Ponmudi maintained a cautiously negative bias below ₹232,000, adding that a sustained break below ₹230,000 could trigger a deeper decline towards ₹225,000. Yadav said gold and silver could face further near-term pressure if US inflation remains elevated, oil stays above $100–105 and Treasury yields remain high. However, if oil prices stabilise, yields retreat and expectations of lower US rates return, the current decline could prove to be a healthy correction within the broader uptrend. He noted that some intraday stabilisation was already visible, with COMEX gold recovering from early weakness and MCX gold and silver bouncing from their day's lows. Disclaimer: This story is for educational purposes only. The views and recommendations above are those of individual analysts or broking companies, not Mint. We advise investors to check with certified experts before making any investment decisions. Dhanya Nagasundaram works as a Content Producer at LiveMint, specializing in news related to financial markets, stocks, and business. With over eight years of experience in journalism and content creation, she has honed her skills in data-driven reporting and market analysis. Her focus is on monitoring stock trends, initial public offerings (IPOs), corporate news, policy shifts, and larger economic trends that affect investors and market players. <br><br> At LiveMint, Dhanya consistently writes and produces articles that make complex financial topics accessible to readers. She keeps a close eye on equity markets, commodities, and macroeconomic indicators, assisting audiences in comprehending how global and domestic events influence investment perspectives. Her stories frequently underscore emerging trends within sectors, the IPO market, company earnings results, and market strategies pertinent to both retail and institutional investors. <br><br> Before her tenure at LiveMint, Dhanya accumulated a wealth of professional experience at various companies, including MintGenie, Informist, Cogenics, Chary Publications, KPMG, and the Royal Bank of Scotland. These positions allowed her to establish a solid foundation in financial research, reporting, and content creation. <br><br> Throughout her career, she has explored numerous subjects such as trading strategies, commodities, IPOs, wealth generation, corporate profits, and macroeconomic indicators. Her background in both financial journalism and corporate settings has given her the ability to tackle stories with analytical rigor while ensuring clarity for her audience. Through her contributions, Dhanya strives to deliver insightful, trustworthy, and investor-centric financial content. Catch all the Business News , Market News , Breaking News Events and Latest News Updates on Live Mint. Download The Mint News App to get Daily Market Updates. Oops! Looks like you have exceeded the limit to bookmark the image. Remove some to bookmark this image.
document fetched 2026-09-12 02:58 · canonical https://livemint.com/market/commodities/gold-etfs-slide-over-1-silver-plunges-3-why-prices-are-falling-and-what-investors-should-watch-11789112427627.html