Gold and silver ETFs fell sharply on Wednesday as precious metal prices came under pressure. The decline came after renewed tensions between the US and Iran lifted crude oil prices and strengthened the US dollar.
According to data on Groww website, major Gold ETFs, including Nippon India Gold BeES, fell around 3.4%. Similar schemes from SBI, ICICI and others also recorded losses. Silver ETFs witnessed steeper declines, with Tata Silver ETF, Nippon India Silver ETF and HDFC Silver ETF dropping by as much as 5% during the trading session.
Earlier in the day, Reuters reported that gold prices fell more than 2% to their lowest level on Wednesday in over two months. This followed as renewed fighting in the Middle East reduced hopes of a resolution to the US-Israeli conflict with Iran. The escalation has raised concerns about inflation and the possibility of higher interest rates.
Spot gold was down 2.1% at $4,172.44 per ounce, its lowest level since March 23. US gold futures for August delivery shed 2.1% to $4,195.60, the report added.
Why Are Precious Metals Under Pressure?
The fresh pressure on gold was seen after Iran's Revolutionary Guards said that they launched missile and drone attacks on US military bases in Jordan, Kuwait and Bahrain in response to US strikes on Iranian targets near the Strait of Hormuz.
The latest escalation marks one of the most significant exchanges between the two sides since they agreed to a ceasefire in April. According to Reuters, gold has fallen more than 20% since the US-backed conflict with Iran began in late February.
"Gold remains a victim of growing inflation risks despite geopolitical tensions fuelling risk aversion. Renewed US-Iran hostilities have essentially sabotaged efforts to end the war," Lukman Otunuga, senior research analyst at FXTM, told Reuters.
This trend was also reflected in data released by the Association of Mutual Funds in India on Wednesday, which showed that Gold ETFs recorded net outflows in May.
According to the AMFI, gold ETFs witnessed net outflows of Rs 725 crore in May. The withdrawal marked the first monthly outflow from the category in 13 months, ending a sustained run of positive net inflows since April 2025.
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