Precious metal ETFs fell sharply on Thursday after a sudden sell-off in futures markets ended a brief two-day rebound. Silver-linked ETFs were hit the hardest, suffering the largest losses.
The decline started with a sharp drop in silver futures on the Multi-Commodity Exchange (MCX) early in the day. This fall quickly affected ETFs, exposing investors to one of the most volatile trading sessions in recent months.
MCX silver futures for March delivery plunged nearly 10% to around Rs 2,43,000 per kg, reversing recent gains. Gold futures also fell but to a smaller extent. April gold contracts dropped about 3%, trading near Rs 1,48,500 per 10 grams.
As futures prices fell, the value of ETFs tracking these metals also dropped sharply. ETF prices are updated in real time to reflect the current market value of the metals they track, so investors experienced immediate losses.
Market experts said that the sudden volatility highlights the risks of investing in precious metals through ETFs. They advised investors to be cautious, as sharp swings in futures markets can quickly affect ETF valuations.
The sell-off shows how futures markets and ETFs are closely linked, and any sudden movements in commodity prices can have a direct impact on investment products tied to those metals.