Gold, silver ETFs crash up to 24% as precious metals tumble further from record highs: Should you buy?

Gold and silver ETFs crash

• Gold and silver ETFs fell sharply as metal prices dropped after a record rally.
• Gold futures fell around 9 percent; silver futures dropped up to 15 percent
• Market divided on whether to buy the dip or wait amid ongoing volatility

Did our AI summary help?

Gold and silver exchange traded funds (ETFs) crashed in trade on January 30, as the prices of the precious metals plunged after a record rally.

Gold futures with April expiry on MCX dropped around 9 percent to trade at Rs 1,68,000 per 10 grams. This comes a day after the contracts hit a fresh lifetime high of Rs 1,93,096 per 10 grams. The contracts with February and June expiries fell around 9 percent each in the afternoon trading hours of Friday.

Silver futures with March expiry meanwhile dropped 15 percent to Rs 3,39,910 per kilogram. The contracts with May and July expiries also fell 15 percent and 12 percent respectively.

Gold and silver ETFs crash:

Nippon India ETF Gold BeES, which has delivered a return of 104 percent over the past one year, dropped around 10 percent. ICICI Prudential Gold ETF also plunged nearly 10 percent, while Axis Gold ETF fell around 12 percent.

UTI Gold ETF, Edelweiss Gold, ETF, HDFC Gold ETF, Quantum Gold ETF, DSP Gold ETF and others also significantly dropped in trade.

Among the silver ETFs, Axis Silver ETF crashed 24 percent, while ICICI Prudential Silver and Kotak Silver ETF fell nearly 23 percent. SBI Silver ETF and others fell more than 22 percent each.

Mirae Asset Silver ETF, Motilal Oswal Silver ETF, HDFC Silver ETF and Nippon India Silver ETF also plunged sharply.

Why are gold and silver prices crashing today?

The sharp fall in global prices of the precious metals comes amid speculations that the US Federal Reserve may get a more hawkish chair. Spot gold fell 5 percent on Friday, a day after hitting a record high of $5,594.82.

US President Donald Trump said he intends to announce his pick to replace Fed Chair Jerome Powell on Friday, as speculation intensifies over who will lead the American central bank after Jerome Powell steps aside in May.

"So, a potentially less dovish Fed Chairman pick, a rebound in the dollar and gold giving way to overbought conditions have contributed to the decline in the price of the precious metal," Reuters quoted KCM Chief Trade Analyst Tim Waterer as saying.

"Rumours that Kevin Warsh will replace Jerome Powell as Fed Chair has weighed on gold during Asian trade," said Matt Simpson, a senior analyst at StoneX, as quoted by the report.

What should you do?

The market is divided between those viewing corrections as buying opportunities and those warning of overheated conditions, said Tanvi Kanchan, Associate Director at Anand Rathi Share and Stock Brokers. She however added that despite price swings, fundamentals are compelling, driven by near-record industrial demand from solar panels, electric vehicles, and AI infrastructure.

Kanchan however cautioned that after such explosive gains in 2025, timing a single entry point is “treacherous”. “Rather than deploying capital all at once, investors should consider spreading purchases over the coming weeks or months. This approach captures the dip while protecting against further corrections that could see silver test,” she said.

For conservative investors, allocating 5-10 percent of portfolios to precious metals ETFs through systematic purchases reduces timing risk while maintaining exposure to an asset class that benefits from geopolitical instability and monetary policy uncertainty, according to the expert.

With structural drivers such as central-bank accumulation, long-term demand and inflation hedging undiminished, disciplined investors may see this correction as a strategic accumulation zone, but should avoid aggressive short-term speculation given ongoing volatility, Khoo from VT Market said.

Nirpendra Yadav, Senior Commodity Research Analyst at Bonanza, said that with global uncertainties, central bank gold accumulation, and expectations of softer real interest rates over the medium term, gold continues to play an important portfolio-hedging and diversification role.

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