Gold and silver ETFs slip up to 8% amid Israel attack and crude oil spike. What should investors do?

Gold and silver ETFs fell by up to 8% on Monday after prices of both precious metals opened sharply lower on the Multi-Commodity Exchange (MCX). The decline came as escalating tensions in the Gulf drove crude oil prices higher, stoking fresh inflation concerns, while stronger-than-expected US economic data reinforced expectations that interest rates may remain elevated for longer.

Out of 23 gold ETFs, Baroda BNP Paribas Gold ETF and Kotak Gold ETF fell the most, around 5% each, whereas the other gold ETFs corrected between 3% and 4% on Monday. Nippon India ETF Gold BeES, the largest fund in the category based on assets managed, corrected 3%. SBI Gold ETF, Zerodha Gold ETF, and HDFC Gold ETF corrected 3% on Monday.

The 18 silver ETFs fell between 7% and 8%. HDFC Silver ETF, SBI Silver ETF, Kotak Silver ETF, and UTI Silver ETF were down 8% each.


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Anup Bhaiya, Founder, Money Honey Wealth Services Ltd, told ETMutualFunds that on Friday, gold steadied around $4,300–$4,320 per ounce while silver traded near $67–$68 after recent sharp corrections amid a stronger dollar and macro data.

He further said that for long-term investors, this healthy pullback creates an attractive accumulation window, backed by enduring safe-haven demand, central bank buying, and inflation-hedging fundamentals in a volatile global environment.

In the domestic market, MCX silver futures for July 2026 delivery were down Rs 5,537 (2.23%) to Rs 2,43,000 per kg. Gold futures for August 2026 delivery slipped Rs 1,792 (1.15%) to Rs 1,53,802 per 10 grams. In the previous session, silver crashed nearly 7%, while gold dipped over 2%.

Investor sentiment was also shaped by developments in the Middle East. According to an Axios report, US President Donald Trump said on Sunday that he would urge Israeli Prime Minister Benjamin Netanyahu not to retaliate after Iran launched a barrage of missiles at Israeli targets in response to an attack on the outskirts of Beirut.

While gold is often considered a hedge against inflation, higher interest rates typically diminish the attractiveness of the non-yielding asset. Market participants are increasingly factoring in the possibility of another Federal Reserve rate hike later this year, with CME Group's FedWatch Tool currently indicating a 51% probability of a rate increase by December.

In the international market, gold prices remained under pressure, with spot gold falling 0.2% to $4,321.49 per ounce as of 0124 GMT after sliding nearly 3% on Friday to its lowest level since March 24. Among other precious metals, spot silver declined 0.4% to $67.52 per ounce and platinum eased 0.2% to $1,773.69, while palladium outperformed, rising 0.5% to $1,231.51 per ounce.

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Abhishek Bhilwaria, Partner at BhilwariaFinserv, shared with ETMutualFunds that Gold and silver are currently undergoing a healthy corrective phase after multi-year rallies, presenting long-term investors with strategic accumulation opportunities rather than a cause for panic.

He further said that instead of making emotional lump-sum purchases during these sharp dips, investors should stagger their entries using a systematic investment plan (SIP) to build a balanced precious metals basket.

“For optimal efficiency, look to capture spot price shifts through highly liquid digital assets like Exchange-Traded Funds (ETFs) or digital gold rather than physical bars and jewellery, which carry expensive dealer premiums and manufacturing markups,” Bhilwaria further said.

(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)

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