The decline followed a global sell-off in technology stocks and a stronger US dollar, which wiped out most of the gains seen during a brief rebound earlier this week.
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On Friday, Kotak Silver ETF led losses with a 10% drop, while HDFC Silver ETF, SBI Silver ETF, and Edelweiss Silver ETF fell 9% each. Bandhan Silver ETF saw the smallest decline, around 6%.
Among gold ETFs, Angel One Gold ETF slipped 8%, followed by Zerodha Gold ETF, which fell 5%.
Hareesh V, Head of Commodity Research, Geojit Investments, shared with ETMutualFunds that Gold and silver remain volatile as last week’s steep plunge was driven by hawkish Fed expectations after Kevin Warsh’s nomination, a stronger dollar, and sharp CME margin hikes that forced leveraged unwinding. Profit‑taking after record highs also amplified rapid swings, keeping market sentiment fragile.
While recommending what investors should do, Hareesh V said bullion investors should stay patient and avoid reacting to short‑term volatility triggered by margin hikes, profit‑taking, and policy uncertainty.“Gradual, staggered accumulation can help manage timing risks as long‑term fundamentals like geopolitical tensions, central‑bank demand, and currency pressures remain supportive.”
He further said that monitoring the dollar and upcoming Fed signals is crucial, while keeping positions balanced to navigate heightened volatility.
In today’s session, MCX silver futures for March 5, plunged 6%, up Rs 14,628 to Rs 2,29,187 per kg. Gold futures for April 2, delivery slipped Rs 2,675, or 2%, to Rs 1,49,396 per 10 grams.
In international markets, spot gold rose 0.4% to $4,790.80 per ounce as of 0224 GMT, though the metal remained down 1.4% for the week. U.S. gold futures for April delivery declined 1.7% to $4,806.50 per ounce.
On Thursday, the commodity-based ETFs slipped upto 21% with silver based ETFs plunging as much as 21%, and gold-based ETFs dropped upto 7% on Thursday.
Just a day after a 4.5% margin hike on silver futures and 1% on gold futures, effective February 5. A further additional margin of 2.5% on silver futures and 2% on gold futures has come into effect today, over and above the margins already in place. As a result, the total additional margin will stand at 7% for silver futures and 3% for gold futures from February 6 onward.
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Akshat Garg, Head – Research & Product of Choice Wealth, told ETMutualFunds that Silver has come off mainly because it had run up too fast in a short period. Silver, by nature, reacts more sharply than gold. It is a smaller and thinner market, so when selling starts, the fall looks steeper. During such phases, short-term selling and lower liquidity can make ETF prices look even weaker. This is more about price adjustment and profit-booking than any sudden deterioration in silver’s fundamentals
Garg further said, “There’s no need for panic. Silver is a volatile asset and sharp ups and downs are part of the journey. One correction does not change the long-term relevance of silver, but it does remind investors why position sizing matters.”
“Investors should avoid chasing prices or reacting to day-to-day moves. If someone wants exposure, staggered buying is a far more sensible approach than lump-sum investing, especially in a volatile phase like this. For long-term investors, this phase is about patience and discipline rather than action,” Garg added.
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