Gold, Silver ETFs Tumble as Precious Metal Prices Fall

Gold and silver exchange-traded funds (ETFs) tumbled on June 25 as prices of precious metals weakened. Silver ETFs registered steeper losses than their gold counterparts as silver futures continued to retreat from recent highs.

During morning trade, Nippon India Silver ETF, SBI Silver ETF, ICICI Prudential Silver ETF and Tata Silver ETF declined by nearly 4%. Among gold-backed funds, ICICI Prudential Gold ETF, SBI Gold ETF, Nippon India ETF Gold BeES and Tata Gold ETF fell by around 2%.

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Silver ETFs Lead Losses

The sharp decline in silver ETFs followed weakness in domestic silver futures on the Multi Commodity Exchange (MCX). Silver futures for July delivery fell nearly 1% during early trade.

Silver prices witnessed significant volatility at the market open. Silver fell close to ₹3,000 per kg in early part of the contract before making up some of the lost ground. Silver was still down by near ₹17,000 per kg in first four trading sessions of the week.

The correction has weighed heavily on silver-focused ETFs, which generally track movements in the underlying metal and tend to reflect short-term price swings more sharply.

Gold Prices Also Under Pressure

Gold ETFs also traded lower as gold futures weakened on MCX. The August gold contract slipped during early trade before recovering some ground later in the session.

Even after the recovery, gold prices remained substantially below levels seen at the end of last week. Domestic gold futures have lost more than ₹5,000 per 10 grams from recent levels, reflecting a broader decline in global bullion markets.

A stronger U.S. dollar and expectations of a tighter stance on interest rates by the U.S. Federal Reserve have been fueling weakness in gold prices. Higher interest rates typically reduce the attractiveness of non-yielding assets such as gold.

Global Market Trends Weigh on Bullion

International gold prices extended their decline after falling below the $4,000-per-ounce mark in the previous session, a level not seen in several months. The stronger dollar and shifting expectations around U.S. monetary policy have continued to pressure precious metals globally.

Silver prices have also faced selling pressure as investors reassessed demand and positioning following the metal’s strong rally earlier this year.

Equities Remain Resilient

While precious metals and related ETFs traded lower, domestic equities remained firm. The benchmark indices continued to advance during the session, supported by broader market buying.

At around 10:45 a.m., the Sensex was trading higher by 542.78 points, or 0.70%, at 77,534.00, while the Nifty 50 gained 153 points, or 0.64%, to 24,174.65.

The divergence was a sign that investors were shifting to risk assets as bullion prices adjusted to changing global monetary and geopolitical conditions.