Silver and gold ETFs slide up to 4% as dollar strengthens. What should investors do?

Silver and gold ETFs fell up to 4% on Thursday as silver and gold prices opened slightly lower on the Multi Commodity Exchange as the US dollar strengthened by around 0.1%, making dollar-denominated bullion more expensive for buyers holding other currencies.

Since precious metals are globally priced in dollars, a stronger greenback means investors using other currencies have to spend more to purchase the same quantity of gold or silver.

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Out of 18 silver ETFs, Motilal Oswal Silver ETF slipped the most of around 4% to hit day’s low of Rs 256.01 against the previous close of Rs 267.23. Five ETFs in the category - ICICI Prudential Silver ETF, Zerodha Silver ETF, Axis Silver ETF, Edelweiss Silver ETF and 360 One Silver ETF went down 3% each whereas the others fell 2% each.

Among the 25 gold ETFs, Zerodha Gold ETF slipped the most of around 3%, whereas the others registered a decline of 1% to 2% on Thursday.

MCX silver futures due May 2026 were down Rs 2,126 or 0.8% to Rs 2,66,362 per kg. Meanwhile, gold futures for April 2026 delivery fell Rs 708 or 0.43% to Rs 1,61,081 per 10 grams.

In the international market, spot gold was down 0.1% at $5,172.86 per ounce as of 0221 GMT, while U.S. gold futures for April delivery remained unchanged at $5,178. Meanwhile, spot silver fell 0.3% to $85.49 per ounce.

Manoj Kumar Jain of Prithvi Finmart said that currently we are witnessing very high volatility in both precious metals. However, silver prices could hold their support level of $74.00 per troy ounce, while gold may sustain its support at $4,940 per troy ounce on a closing basis this week.

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Jain further expects gold and silver to remain volatile amid fluctuations in the dollar index, the US-Iran war and sharp moves in crude oil prices.

Jain advised investors to wait for some stability in the markets before initiating fresh positions.

(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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