What’s the story
Gold and silver exchange-traded funds (ETFs) have witnessed a sharp decline in their values.
The fall comes after a record-high rally in the prices of these precious metals.
On January 30, gold futures for April delivery on the Multi Commodity Exchange (MCX) fell by nearly 5% to ₹1,75,100 per 10gm.
This is a major drop from the previous day’s all-time high of ₹1,93,096 per 10gm.
Silver futures and ETFs also witness significant drop
Silver futures for March delivery on MCX fell by nearly 6% to ₹3,75,900 per kilogram.
This is in line with the trend seen in gold contracts for February and June deliveries, which also fell by around 6% each.
The decline has been reflected across several ETFs including Nippon India ETF Gold BeES and ICICI Prudential Gold ETF, both of which fell nearly 10%.
Speculations about US Federal Reserve chair impact gold prices
The sharp fall in the global prices of gold and silver is being attributed to speculations that the US Federal Reserve may appoint a more hawkish chair.
Spot gold fell by 5% on Friday, a day after hitting an all-time high of $5,594.82.
US President Donald Trump has said he will announce his pick to replace Fed Chair Jerome Powell today.
Experts suggest gradual ETF purchases amid market volatility
Tim Waterer, Chief Market Analyst at KCM, told Reuters that a potentially less dovish Fed Chairman pick, a rebound in the dollar and gold giving way to overbought conditions have contributed to the decline in price.
Tanvi Kanchan from Anand Rathi Share and Stock Brokers said that despite price swings, fundamentals are compelling due to near-record industrial demand from solar panels, electric vehicles (EVs), and AI infrastructure.