Gold, Silver ETFs Fall Across the Board on Monday

Mumbai, Aug 31: Gold and silver exchange-traded funds fell sharply on the domestic bourses on Monday, with every major precious-metals ETF trading in the red even as broader market anxiety over the Iran-US flare-up kept investors on edge. Not a single gold or silver ETF tracked on the exchanges was in positive territory, a sharp reversal for a category that has delivered some of the strongest returns of the past year. 

Silver ETFs 

Among silver ETFs, the losses were the steepest across the ETF universe. Nippon India’s SILVERBEES fell 3.04 per cent, HDFC Silver ETF (HDFCSILVER) dropped 3.19 per cent, and SBI Silver ETF (SBISILVER) declined 3.14 per cent. UTI Silver ETF (SILVERBETA) and Kotak Silver ETF (SILVER1) each fell around 3.14-3.16 per cent, while Mirae Asset Silver ETF (SILVERAG) posted the sharpest fall among major silver funds, down 3.33 per cent. ICICI Prudential’s SILVERIETF slipped 2.92 per cent, Tata Silver ETF (TATSILV) fell 3.04 per cent, DSP Silver ETF (SILVERADD) declined 3.06 per cent, and Axis Silver ETF (SILVERAXIS) was the relative outperformer among silver funds, down a comparatively smaller 2.51 per cent. 

Gold ETFs 

Gold ETFs also declined across the board, though the losses were somewhat shallower than silver. Nippon India’s GOLDBEES, the largest gold ETF by traded value, fell 2.6 per cent, while ICICI Prudential’s GOLDIETF dropped 2.82 per cent and Axis Gold ETF (GOLDAXIS) declined 2.96 per cent. Tata Gold ETF (TATAGOLD) fell 2.41 per cent, SBI’s SETFGOLD slipped 2.83 per cent, and HDFC Gold ETF (HDFCGOLD) declined 2.76 per cent. Mirae Asset’s GOLDETF was among the smaller decliners, down 2.19 per cent, while Aditya Birla Sun Life’s BSLGOLDETF posted the shallowest fall among major gold funds, down just 1.92 per cent. DSP’s GOLDADD ETF fell 2.28 per cent, and Zerodha’s GOLDCASE declined 2.69 per cent. 

A Rare Broad-Based Pullback 

With every gold and silver ETF on the list ending lower, Monday’s session marks a rare broad-based pullback in a segment that has otherwise been the standout performer of the year. Silver ETFs such as SILVERBEES and HDFC Silver ETF are still up more than 100 per cent over the past 365 days, while gold ETFs including GOLDBEES have gained more than 53 per cent over the same period, underlining just how strong the underlying rally has been before Monday’s sharp correction. 

The simultaneous decline in both metals, even against a backdrop of escalating tensions in the Middle East, suggests the pullback is being driven less by the geopolitical newsflow and more by profit-booking after an extended rally, along with a firmer dollar and rising US bond yields as traders price in a greater chance of a Federal Reserve rate hike following Fed Chairman Kevin Warsh’s hawkish comments at Jackson Hole. Higher interest rates typically raise the opportunity cost of holding non-yielding assets like gold and silver, which can offset any safe-haven demand that geopolitical risk might otherwise generate. 

Outlook 

Investors will watch whether the sell-off in precious metals ETFs is a one-day correction or the start of a deeper pullback, especially if the Fed moves closer to an actual rate hike in the coming months. For now, with both metals seeing gains of over 11 per cent in the past 30 days alone, Monday’s declines look more like a breather than a trend reversal, though the size of the fall across nearly every listed gold and silver ETF suggests the correction was broad-based rather than isolated to a handful of funds. Traders tracking the space will likely keep a close eye on international spot gold and silver prices through the week for further direction. 

Investors who are looking to diversify beyond physical gold and silver can also explore the list of Gold ETFs and Silver ETFs in India, which track gold and silver prices without the need to store physical metal: https://hdfcsky.com/etf/gold-etf
https://hdfcsky.com/etf/silver-etf 

Source:

• NSE
• https://www.nseindia.com/market-data/exchange-traded-funds-etf