Gold, silver ETFs down 13% amid Iran-war: Should you invest?
What's the story
Gold and silver exchange-traded funds (ETFs) have witnessed a major decline of up to 13% amid rising geopolitical tensions in the Middle East. The sharp correction has left investors wondering if they should stay invested, rebalance their portfolios, or cut exposure to more volatile assets like silver. Market experts suggest that investment decisions related to these commodity-based ETFs should be based on long-term asset allocation strategies.
Expert advice
Investment decisions should be based on long-term asset allocation
Rajesh Minocha, a Certified Financial Planner (CFP) and Founder of Financial Radiance, has advised investors to hold gold ETFs for protection rather than as investments for their goals. He also suggested that if volatility exceeds risk tolerance, consider reducing silver exposure due to its susceptibility to sharp price swings. Pallav Agarwal, another CFP at Bhava Services LLP, echoed this sentiment by saying all investment-related decisions should be based on long-term asset allocation amid the ongoing war situation.
Market performance
Performance of gold, silver ETFs
Since February 27, 2026, silver ETFs have posted an average negative return of 13.12%. DSP Silver ETF was the worst performer with a decline of around 13.33% during this period. In contrast, Angel One Silver ETF declined the least at around 12.44%. Meanwhile, gold-based ETFs have also witnessed a decline averaging at about 7.49% since February-end due to the ongoing geopolitical tensions in West Asia.
Price drop
Gold has fallen nearly 18% since end-February
Gold has fallen nearly 18%, losing around ₹29,000 in value, as investors grapple with rising geopolitical tensions amid the intensifying conflict in West Asia. The war has seen continuous military confrontations between the US, Israel, and Iran. During this time, crude oil, the world's most important commodity has crossed $110 a barrel, sending global markets into a tizzy. Despite these developments normally bolstering precious metals like gold and silver, their prices have continued to fall.
Future outlook
Why are gold and silver prices falling?
Minocha explained that markets anticipate future developments; when a crisis is perceived as stabilized or fully reflected in asset prices, metals often correct. He added that higher bond yields and a stronger dollar put downward pressure on gold. Agarwal blamed the Federal Reserve's stance in its last FOMC meeting, for the fall in precious metal prices as it left interest rates unchanged while only allowing one rate cut this year.