Silver-linked funds led the decline, falling as much as 9%. ICICI Prudential Silver ETF slipped about 7.3%, while Nippon India Silver ETF and SBI Silver ETF fell over 7% each in early deals. Tata Silver ETF also declined more than 7%.
Gold ETFs also traded lower, though losses were relatively contained compared to silver. ICICI Prudential Gold ETF fell nearly 4%, while Nippon India ETF Gold BeES, SBI Gold ETF and Tata Gold ETF dropped around 3–4%.
Global slump weighs despite rebound
The domestic fall largely mirrors Tuesday’s global correction, when gold slid more than 4% and silver plunged over 8% amid a stronger US dollar and reduced expectations of near-term rate cuts. The move occurred while Indian exchanges were closed, leading to a catch-up adjustment in local ETF prices.
International bullion prices rebounded on Wednesday (March 4), supported by renewed safe-haven demand as geopolitical tensions in the Middle East intensified. However, analysts say the earlier sharp decline and profit booking after a strong rally continue to weigh on domestic ETF prices.
In the physical market, 24-carat gold prices in Delhi have fallen roughly ₹2,800–2,900 per 10 grams from recent peaks, tracking the pullback from record international levels above $5,300 per ounce.
Outlook: volatility likely to persist
Satish Dondapati, Fund Manager at Kotak Mahindra Asset Management Company, said gold has gained 2–3% in recent sessions amid rising Iran–Israel–US tensions that boosted safe-haven buying.
He noted that prices could remain firm in the short term if geopolitical risks persist, but added that a cooling in tensions may trigger profit booking or a temporary correction. A stronger US dollar could also cap further upside, as gold typically moves inversely to the currency.
Over the medium to long term, he remains constructive on gold, citing low global investor allocation of around 2–3% of financial assets, continued central bank buying of nearly 1,000 tonnes annually, and elevated global debt levels that may sustain strategic demand for the metal.