Indian gold and silver exchange-traded funds (ETFs) plunged on Thursday as investors unwound their positions following US President Donald Trump’s softened stance against his NATO allies in Europe on the Greenland issue.
Industry sources said silver, in particular, had soared on speculation that there would be a hike in import duty on the white precious metal and when it became clear that there was no such move, prices declined.
On the other hand, silver prices in the Indian domestic market dropped below ₹3 lakh a kg on Thursday as the white precious metal cooled in the global markets, while gold ruled stable.
Trading at premium
“The sharp loss investors experienced (in precious metal) was largely due to a decline in ETF trading prices. But it was not an equivalent decline in NAV (net asset value). Many gold and silver ETFs were trading at a premium to their NAV because of speculative buying. When this premium unwound, ETF prices corrected sharply,” said Prithviraj Kothari, Managing Director at RiddiSiddhi Bullions Ltd and President of India Bullion and Jewellers Association Ltd (IBJA).
For example, if a silver ETF had a NAV of ₹100, it was trading at ₹125 (25 per cent premium). When the price falls to ₹102, the investor sees an 18 per cent loss, even though the NAV dropped only 2 per cent. “So most losses came from premium correction, not a collapse in silver prices or gold prices,” he said.
On Wednesday, Trump withdrew his threat to impose additional tariffs on his NATO allies in Europe. He told the World Economic Forum that he has reached a framework for a deal with NATO over the future of Greenland.
This resulted in silver dropping below $93 an ounce in the global market, before quoting at $93.9 at 2030 hours IST. Silver March futures ruled at $93.89 an ounce.
Spot silver below ₹3 lakh/kg
In the Mumbai spot market, silver fell by ₹20,000 to ₹2,99,711 a kg from ₹3,19,097 on Wednesday. On MCX, silver March futures dropped to ₹3,09,324, down over ₹9,000 from the previous session. Silver March futures on the Shanghai Futures Exchange continue to rule above $100 an ounce.
Gold slipped below $4,800 an ounce before ruling at $4,835.08. Gold February futures were quoted at $4,839.5 an ounce. In the Mumbai spot market, gold ended at ₹1,51,128 per 10 gm and on MCX, February futures of the yellow metal were quoted at ₹1,51,640, down over ₹1,000 from a day ago.
Among silver ETFs, Tata Silver ETF dropped by 16.31 per cent, while among gold ETFs HDFC Gold declined by 7.59 per cent.
Kothari said gold and silver ETFs fell sharply due to profit-booking and unwinding of speculative premiums, especially in silver.
Duty cut rumours
“Ahead of the Budget, rumours of an import duty hike led to aggressive buying, pushing Indian prices and ETFs far above global benchmarks. When it became clear that no immediate policy change was announced, this excess premium was corrected quickly,” he said.
ETFs tend to react faster than futures because they reflect retail flows and arbitrage pressures. Additionally, easing geopolitical tensions reduced short-term haven demand, adding to selling pressure, the IBJA President said.
Meanwhile, the New Delhi-based All India Jewellers and Goldsmiths Federation demanded that SEBI, MCX and other agencies look into “unusually large or concentrated positions” in silver. Federation president Pankaj Arora and secretary Nitin Kedia said they had alerted SEBI 10 days ago that silver was heading towards “largescale manipulation”, with rumours used to inject “artificial premium”.
A spokesperson for MCX said, “”Silver markets globally are experiencing heightened volatility due to evolving geopolitical developments, which along with local fundamentals have been reflected in the domestic market. Prices discovered on MCX provide a hedge against currency movements, duties and local market dynamics.”
The exchange and clearing corporation operate as regulated, rule-based market infrastructure institutions, providing a fair, transparent, and well-supervised market. Robust surveillance monitoring and sound risk management at the market institutions ensures market integrity and orderly functioning in line with regulatory norms, the spokesperson said.
COMEX data
However, Kothari said for long-term investors, Thursday’s correction should be viewed as a healthy reset, not a trend reversal.
“Avoid panic selling, especially if the ETF is now trading closer to its NAV. Fresh investments should be done via SIP or staggered buying, focusing on ETFs with low tracking error and minimal premiums,” he said.
Meanwhile, data from COMEX in the US showed that a huge volume of silver was withdrawn, a record of sorts.
Published on January 22, 2026