Gold, silver ETFs tumble up to 3.6%
What's the story
Gold and silver exchange-traded funds (ETFs) witnessed a sharp decline on Monday, mirroring a global sell-off in precious metals. The fall was mainly due to rising crude oil prices, which have stoked inflation concerns and strengthened expectations of further rate hikes by the US Federal Reserve. Silver ETFs were hit the hardest with losses of up to 3.6%, while gold ETFs fell over 2%.
Market impact
SBI Silver ETF leads the fall
The SBI Silver ETF led the fall among major precious-metal ETFs with a 3.99% decline.
Other affected funds included Nippon India Silver ETF, which fell by 3.57%, Tata Silver Exchange Traded Fund (down 3.51%), and ICICI Prudential Silver ETF (down 3.44%).
Gold ETFs also witnessed significant losses with ICICI Prudential Gold ETF declining by 2.92%, SBI Gold ETF falling by 2.85%, Nippon India ETF Gold BeES slipping by 2.80%, and Tata Gold Exchange Traded Fund dropping by 2.67%.
International trends
International bullion markets also saw a sharp correction
The losses in domestic ETFs mirrored a sharp correction in the international bullion markets.
Spot gold fell 2.1% to $4,198.10 an ounce and was on track for its biggest single-day fall since September 1.
US gold futures also fell by the same margin while spot silver witnessed an even sharper fall of 3.4% to $62.08 an ounce.
Market response
Domestic commodity markets felt the pinch
Domestic commodity markets also felt the pinch with MCX silver futures for September 2026 delivery plunging by ₹6,661 to ₹2,28,035 per kg while October 2026 gold futures declined by ₹3,214 to ₹1,47,667 per 10gm.
The dollar remained firm making bullion priced in the greenback more expensive for investors holding other currencies.
Meanwhile US Treasury yields continued their upward trend amid rising inflation expectations due to higher energy costs from geopolitical tensions affecting oil prices globally.
Future outlook
Traders are pricing in a Fed rate hike in October
Traders are pricing in a 70.3% probability of a Fed rate hike in October, according to CME Group's FedWatch Tool.
Earlier this month, the US Federal Reserve raised interest rates by 25 basis points and signaled that further increases could be on the cards.
Investors will now keep an eye on key US economic data releases due this week including job openings, ADP employment report, Personal Consumption Expenditures (PCE) inflation data, and non-farm payrolls.