Gold and silver exchange-traded funds (ETFs) came under sharp selling pressure on Monday, August 31, as precious-metal prices declined amid growing expectations of higher US interest rates.
As of 12:22 pm IST, silver ETFs were among the biggest losers, with several products falling more than 3%. Kotak Silver ETF declined 3.46%, followed by Mirae Asset Silver ETF at 3.40% and Commodity-Silver at 3.38%. UTI Silver ETF fell 3.37%, while HDFC Silver ETF, SBI Silver ETF, Silver BeES and Tata Silver ETF declined between 3.25% and 3.33%.
Gold ETFs also witnessed broad-based selling. Invesco Gold ETF fell 3.40%, while Union Gold declined 3.32%. Axis Gold ETF was down 3.09%. SBI Gold ETF, Goldman Sachs Gold ETF/GOLDIETF, Baroda BNP Paribas Gold ETF and Edelweiss Gold ETF were also trading lower.
Nippon India ETF Gold BeES, one of the largest gold ETFs, was down around 2.6%, while ICICI Prudential Gold ETF, SBI Gold ETF and HDFC Gold ETF also declined around 2.6%-2.7%. Nippon India Silver ETF, or Silver BeES, fell around 3%.
The weakness in ETFs came as bullion prices declined in domestic and global markets. Gold futures for October delivery fell Rs 2,045, or 1.31%, to around Rs 1.54 lakh per 10 grams, while December silver futures declined Rs 1,955, or 0.81%, to around Rs 2.40 lakh per kg. Spot gold was down around 1.22% at Rs 1,54,940 per 10 grams.
The correction followed hawkish comments from US Federal Reserve Chair Kevin Warsh at Jackson Hole, which strengthened expectations of higher US interest rates. Higher US Treasury yields and a stronger dollar tend to weigh on non-yielding assets such as gold and silver.
Silver has seen a sharper correction than gold, reflecting its typically higher volatility. However, the longer-term outlook for gold remains supported by investment and central-bank demand.
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