Analysts note that rupee appreciation may add further volatility but also present long-term strategic buying opportunities
After two-days of steady recovery, both gold and silver exchange-traded funds declined sharply on Thursday on the back of a sudden dip in the prices of the precious metals in the global markets.
While gold ETFs were down upto 5 per cent, that of silver fell more sharply between 15 per cent and 20 per cent.
Spot gold prices in the Asian trade were down 1.3 per cent at $4,899 an ounce while gold futures for April delivery slipped 0.6 per cent to $4,919 an ounce as dollar firmed up.
Similarly, silver dropped 16 per cent to $73.56 an ounce while silver futures for March tumbled by a similar percentage to $73.38
In gold ETFs, Nippon India Gold BeES dropped 4 per cent, while DSP Gold declined nearly 5 per cent. Similarly, Axis Gold fell 4 per cent and Tata Gold ETF slipped 3 per cent, while Aditya Birla Sun Life Gold declined 2 per cent.
Among silver ETFs, the HDFC Silver, Nippon India Silver and SBI Silver declined between 9 per cent and 11 per cent. While Kotak Silver ETF slipped 13 pc, ICICI Prudential Silver and Axis Silver were down 11 per cent each.
Rupee impact
Ratish Gupta, Director of Wealth Wisdom India said the recent appreciation in the rupee is likely to add to volatility in gold and silver ETFs going ahead.
“When the rupee strengthens against the dollar, it reduces the landed cost of gold in India. This can temper domestic buying interest as investors expect the prices to go down further and add downward pressure on local gold prices, thereby impacting gold ETF returns,” he said.
The fall in ETFs was commensurate to underlying commodity prices. On MCX, gold futures for April delivery were trading about one per cent lower at ₹1,51,605 per 10 grams on Thursday, while March silver contracts slipped 8 per cent to ₹2,46,250 per kilogram.
The volatility in both gold and prices have increased substantially with the growing uncertainty in the global economy. Between January 28 and February 2, silver and gold spot prices fell 32 per cent and 13 per cent. However, in last two days, silver and gold recovered 11 per cent and 6 per cent only to crash on Thursday.
Investor strategy
Jashan Arora, Director, Master Trust Group, said rupee appreciation should not be viewed as a negative for precious metals.
Periods of rupee strengthening can offer attractive strategic entry opportunities for long-term investors, allowing them to build exposure at relatively lower INR price points in a disciplined manner, he added.
Published on February 5, 2026