Gold and silver exchange-traded funds (ETFs) plunged over 4% on Monday, 28 September, after facing heavy selling pressure, tracking a sharp decline in precious metal prices.
The sell-off came as rising crude oil prices stoked inflation concerns and raised expectations that the US Federal Reserve could pursue further interest-rate hikes.
Silver ETFs witnessed a steeper decline, falling as much as 4%, while gold ETFs dropped more than 2%.
Among major silver ETFs, SBI Silver ETF was the biggest decliner, falling 3.99%. Nippon India Silver ETF dropped 3.57%, while Tata Silver Exchange Traded Fund declined 3.51%. ICICI Prudential Silver ETF also fell 3.44%.
Gold ETFs also remained firmly in negative territory. ICICI Prudential Gold ETF declined 2.92%, followed by SBI Gold ETF, which fell 2.85%. Nippon India ETF Gold BeES slipped 2.80%, while Tata Gold Exchange Traded Fund dropped 2.67%.
What’s behind the fall in ETFs?
The decline in domestic ETFs mirrored a sharp correction in global bullion prices. Spot gold fell 2.1% to $4,198.10 an ounce and was heading for its biggest single-day decline since September 1. US gold futures also declined 2.1% to $4,231. Spot silver witnessed a sharper fall of 3.4% to $62.08 an ounce.
Domestic commodity markets also came under pressure, mirroring the weakness in global precious metals. MCX silver futures for September 2026 delivery fell sharply by ₹6,661 to ₹2,28,035 per kg, while October 2026 gold futures declined ₹3,214 to ₹1,47,667 per 10 grams.
The dollar remained firm, making bullion priced in the greenback more expensive for investors holding other currencies. Meanwhile, US Treasury yields continued to rise.
Brent crude prices rebounded after US President Donald Trump rejected an Iranian proposal aimed at resolving the conflict and reopening the Strait of Hormuz, keeping geopolitical tensions in the Middle East elevated. Higher energy prices can add to inflationary pressures by raising costs across the economy.
According to CME Group’s FedWatch Tool, traders are pricing in a 70.3% probability of a Fed rate hike in October. Earlier this month, the US Federal Reserve raised interest rates by 25 basis points and signalled that further increases could be on the cards.
Investors will now track a series of key US economic data releases due this week, including job openings, the ADP employment report, Personal Consumption Expenditures (PCE) inflation data and nonfarm payrolls.
What should investors do?
According to Akshat Garg, Head- Research & Product, Choice Wealth, gold and silver ETFs are falling today because people are booking profits after a stunning run, not because the story has changed.
Garg further explained that a stronger dollar, higher US bond yields and a hawkish Fed are doing most of the damage, while stubborn crude on the US–Iran standoff keeps inflation worries simmering.
“But step back: silver is still up over 100% and gold over 53% in just a year. A breather after that kind of rally is normal, even healthy. So don’t panic-sell on a red day. You can’t time bullion, but you can stay disciplined — and a SIP in gold and silver is the calmest way to ride out days like this,” Garg added.
Disclaimer: This story is for educational purposes only. The views and recommendations above are those of individual analysts or broking companies, not Mint. We advise investors to check with certified experts before making any investment decisions.
