Gold & Silver ETFs Sink as Dollar Rises: What Investors Should Do
Gold & Silver ETFs Sink as Dollar Rises: What Investors Should Do
Gold and silver ETFs slide as the US dollar strengthens, ending a January rally. Analysts urge caution in the near term while remaining bullish on long-term prospects.
Gold and silver ETFs tumbled after a sharp selloff in the precious-metals space, snapping a strong January rally. Spot gold slid 5.4% to Rs 1.66 lakh per 10 grams, shedding about Rs 9,545 from the previous day. Silver dropped 10.7% to Rs 3.39 lakh per kilogram, marking a steep correction from near-record levels. Nippon India Silver ETF fell 18.6% to Rs 286.48, ICICI Prudential Silver ETF down 20.14%, and DSP Silver ETF down 19.48%. For gold ETFs, Nippon India ETF Gold BeES fell 10.52% and ICICI Prudential Gold ETF 8.94%. The driver: a firmer US dollar — roughly a 0.3% rise — and expectations of a hawkish Federal Reserve, which dampened demand for non-interest-bearing assets. A technical correction after a rapid run-up and profit-booking helped fuel the move, with near-term volatility weighing on sentiment. While the near term looks volatile, there is no major change in the longer-term fundamentals for gold and silver, which are still viewed as hedges and safe-haven assets in uncertain times. Investors are urged to review exposure and manage risk, rather than chase quick gains. A diversified approach, with clear stop levels and goals, may help weather the volatility. Watch for policy shifts from the US Fed and any changes in dollar strength that could spark a rebound in prices. Despite the pullback, the longer-term case remains intact as inflation concerns and geopolitical tensions support demand for bullion. Traders in Mumbai and across India will be watching the dollar and Fed signals in the days ahead.
