Gold And Silver ETFs Drop Up To 5% As Precious Metals Slide Globally

Gold and silver exchange-traded funds (ETFs) witnessed a sharp decline of up to 5 percent on Wednesday as selling pressure intensified in the precious metals market amid renewed global geopolitical tensions and a stronger US dollar. The downturn came as investors reacted to escalating US-Iran hostilities and shifting expectations in global financial markets.

The sell-off was led by major gold ETF schemes, with funds such as Nippon India Gold BeES falling around 3.4 percent, according to data from Groww. Other leading schemes from SBI, ICICI and similar fund houses also ended the session in negative territory, reflecting broad-based weakness across the category. Silver ETFs experienced steeper losses, with Tata Silver ETF, Nippon India Silver ETF and HDFC Silver ETF declining by as much as 5 percent during intraday trade.

The weakness in domestic ETFs mirrored global trends, where gold prices fell sharply. Reuters reported that spot gold dropped more than 2 percent to its lowest level in over two months, while US gold futures also slipped by a similar margin. The decline was attributed to renewed geopolitical tensions in West Asia and shifting investor sentiment towards risk assets.

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Market participants noted that escalating conflict between the United States and Iran contributed to volatility across asset classes. Reports indicated that Iran’s Revolutionary Guards launched missile and drone strikes on US military bases in Jordan, Kuwait and Bahrain following earlier US strikes on Iranian targets near the Strait of Hormuz. The escalation added further uncertainty to global markets while simultaneously strengthening the US dollar, which weighed on bullion prices.

Analysts also pointed out that gold has remained under pressure despite geopolitical risks typically supporting safe-haven demand. Experts cited by Reuters noted that inflation concerns and expectations of higher interest rates have limited upside momentum for precious metals. The trend has been further reflected in mutual fund data, which showed gold ETFs in India recording net outflows of Rs 725 crore in May, the first monthly withdrawal in over a year.

With volatility persisting in global energy and currency markets, investors are closely watching further developments in the US-Iran situation, which continues to influence commodity prices and broader financial sentiment worldwide.

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