13 February 2026 (Navroze Bureau) : Gold and silver exchange-traded funds (ETFs) have witnessed a sharp correction, with several funds plunging up to 10% in recent sessions. The sudden fall has rattled investors who traditionally view precious metals as safe-haven assets during periods of market uncertainty. The decline comes at a time when global financial markets are grappling with volatility driven by interest rate expectations, currency movements, and shifting investor sentiment.
Market experts attribute the selloff primarily to rising global bond yields and a stronger US dollar, which typically weigh on precious metal prices. Since gold and silver do not offer interest income, higher yields make them less attractive compared to fixed-income assets. As a result, investors have reduced exposure to metal-backed ETFs, leading to sharp price corrections.
Another key factor behind the fall is profit booking. Gold and silver prices had rallied strongly over the past year on geopolitical tensions, central bank buying, and fears of economic slowdown. Many investors used the recent highs as an opportunity to book gains, triggering a wave of selling in ETFs.
Silver ETFs have been hit harder than gold due to silver’s dual role as both a precious and industrial metal. Concerns over slowing industrial demand—especially from manufacturing and green energy sectors—have added pressure on silver prices. This has translated into steeper losses for silver-backed ETFs compared to their gold counterparts.
The correction has sparked anxiety among retail investors, particularly those who entered gold and silver ETFs at higher levels. Financial advisors, however, caution against knee-jerk reactions. “Corrections of 5–10% are not unusual in commodities,” said a market strategist. “Gold and silver are long-term portfolio hedges, not short-term trading instruments.”
Experts emphasize that the purpose of investing in gold and silver ETFs is diversification and risk protection, not rapid returns. For long-term investors, the current decline may not necessarily warrant an exit, especially if the original investment thesis remains intact.
One important aspect investors should assess is their asset allocation. If exposure to gold and silver exceeds recommended levels—generally 5–10% of a portfolio—it may be wise to rebalance. On the other hand, investors with limited or no exposure may consider staggered investments through systematic buying, rather than lump-sum entries.
Fundamentals for gold remain mixed but supportive over the long run. Central banks across the world continue to add gold to their reserves, providing structural demand. Additionally, geopolitical risks and concerns about global debt levels may support prices in the medium to long term, even if short-term volatility persists.
Silver’s outlook is more volatile but potentially rewarding. While short-term demand concerns exist, long-term prospects linked to electric vehicles, solar panels, and industrial applications remain strong. This makes silver ETFs more suitable for investors with a higher risk appetite and longer investment horizon.
Currency movements also play a role in ETF performance. In India, fluctuations in the rupee against the US dollar can amplify gains or losses in gold and silver ETFs. A weaker rupee can partially cushion declines in global metal prices, while a stronger rupee may deepen losses.
Market advisors recommend avoiding panic selling during sharp corrections. Instead, investors should review their financial goals, time horizon, and risk tolerance. Those investing for long-term wealth preservation may continue holding, while short-term traders should use stop-loss strategies to manage downside risk.
In the coming weeks, precious metal prices are expected to remain sensitive to global economic data, central bank commentary, and interest rate outlooks. Any signs of slowing growth or easing monetary policy could revive interest in gold and silver.
For now, the sharp fall in gold and silver ETFs serves as a reminder that even safe-haven assets are not immune to market cycles. Disciplined investing, diversification, and patience remain key to navigating such volatility.
Summary
Gold and silver ETFs have fallen up to 10% due to rising bond yields and profit booking. Experts advise investors to stay calm, review asset allocation, and focus on long-term diversification goals.