Precious Metal ETFs Tumble Over 9% Amid Geopolitical Easing, Expert Calls for Long-Term Focus

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AuthorAnanya Iyer|Published at:
Precious Metal ETFs Tumble Over 9% Amid Geopolitical Easing, Expert Calls for Long-Term Focus
Overview

On January 22, 2026, Gold and Silver Exchange Traded Funds (ETFs) listed on the NSE experienced significant downturns, with several funds dropping over 9% and Tata Silver ETF falling as much as 13.6%. This steep decline contrasted with more moderate movements in futures markets. Analysts attribute the sell-off to easing geopolitical tensions and profit-booking, urging investors to maintain a long-term perspective and avoid impulsive decisions. Fundamental, Regulatory, and Live Market data streams were not provided for this report.

Precious Metal ETFs Face Steep Sell-Off

On January 22, 2026, Exchange Traded Funds (ETFs) tracking gold and silver on the National Stock Exchange (NSE) registered substantial losses, with prices across the board declining by over 9%. Specifically, Tata Silver ETF saw a significant drop of 13.6%, while other silver ETFs also fell by more than 9%. In the gold ETF segment, BSL Gold ETF declined by 9.53%, followed by Tata Gold ETF at 8.54%, and Axis Gold ETF at 8.47%. These movements indicate a broad-based negative sentiment affecting precious metal investments through the ETF route. Fundamental, Regulatory, and Live Market data streams were not available for this report.

Divergence from Futures and Expert Analysis

This sharp decline in ETFs contrasted markedly with the performance of futures contracts. On the Multi Commodity Exchange (MCX), gold futures for February delivery dipped by 0.77%, and March silver futures slipped by 1.2%. This divergence highlights how ETF prices can react more acutely to market sentiment than their underlying assets. Experts, including Amar Ranu, Head - Investment Products & Insights at Anand Rathi Share and Stock Brokers, suggested that the drawdowns brought ETF prices closer to domestic physical and international market values. Ranu attributed this trend to an easing of global geopolitical tensions, coupled with investors booking profits and moving away from these volatile assets. Such price sensitivity in commodity-linked investments is typical, according to Piyush Jhunjhunwala, Founder & CEO of Stockify, who noted these movements signal short-term market volatility rather than permanent loss of value.

Navigating ETF Volatility: A Long-Term Perspective

Analysts like Prasenjit Paul, Equity Research Analyst at Paul Asset & Fund Manager at 129 Wealth Fund, pointed out that ETFs can create an 'illusion of stability', potentially unsettling investors during sharp price movements. The current fall is viewed by some as a rationalization, aligning ETF prices more closely with actual market values, particularly for those who may have invested at a premium in recent months. For existing investors, this period serves as a reminder to focus on long-term objectives rather than reacting impulsively to daily fluctuations. Experts recommend patience and maintaining portfolio balance, considering these drawdowns as temporary adjustments. Given the strong structural demand for silver across industries, a Systematic Investment Plan (SIP) or Systematic Transfer Plan (STP) approach for silver ETFs is often advised over lump-sum investments, with both gold and silver ideally comprising no more than 10% of an overall investment portfolio.

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