Gold and silver prices have been on a rollercoaster ride in recent sessions, driven by profit-booking at elevated levels. Despite this volatility, the medium- and long-term outlook for these precious metals remains optimistic.
Current Market Overview
On Tuesday, the Multi Commodity Exchange (MCX) reported a significant decline in precious metal prices. Gold prices fell by more than ₹2,000, or 1.3%, settling at ₹1,56,001 per 10 grams. Meanwhile, silver prices plunged over ₹5,500, translating to a drop of more than 2%, bringing the price down to ₹2,57,100 per kg.
Currently, gold prices are trading approximately 16% below their record high of ₹1,80,779 per 10 grams, which was reached on January 29. Silver, on the other hand, is still 59% away from its all-time high of ₹4,08,487 per kg.
The Factors Behind the Slump
The recent pullback in gold and silver prices can be attributed to profit-booking and shifting macroeconomic expectations. Investors are particularly focused on the US Federal Reserve’s stance on interest rates. Following three consecutive rate cuts since September 2025, the Fed is expected to maintain interest rates at their current levels. This change in outlook has led to a decline in gold prices, which fell between 2% and 8% from recent peaks before staging a mild recovery over the past week.
Despite this correction, gold’s long-term strategic appeal remains intact. The macroeconomic backdrop continues to be favorable, supported by constrained supply growth, persistent geopolitical risks, and sustained central bank buying, which is likely to remain near 2025 levels.
ETF Performance in India
In India, gold ETFs have seen a remarkable surge in net inflows, recording their highest-ever figures in January 2026. According to AMFI data released on February 10, inflows to gold ETFs more than doubled from the previous month, reaching ₹24,040 crore. This surge indicates exceptionally strong gold demand, driven by investors seeking safe-haven assets and diversification opportunities.
On the flip side, the volatility in precious metals has also impacted gold and silver-linked ETFs. After delivering strong returns in early 2026, these ETFs have witnessed sharp declines in recent sessions. On Tuesday, gold ETFs were mostly trading flat, with Nippon India Gold BeES down by 0.03% and ICICI Prudential Gold up by 0.15%. In contrast, silver ETFs like Tata Silver Exchange and Nippon India Silver saw losses of up to 5%.
Should You Invest in Gold and Silver ETFs?
For small and marginal investors, gold and silver ETFs present an attractive investment option. They offer ample liquidity, ease of purchase and sale, and eliminate concerns about depreciation and making charges when selling. Investment expert Jitendra Solanki emphasizes that ETFs allow even small investors to gain exposure to gold and silver with minimal capital, making them a convenient alternative to physical metals.
However, caution is advised. Sriram BKR, Senior Investment Strategist at Geojit Financial Services, points out that current metal prices are still elevated. While new, sustainable fundamental factors could support these prices, the current signals are mixed. He advises investors to avoid chasing recent rallies and to maintain disciplined asset allocation.
Rochan Pattnayak, Chief Investment Officer at Choice AMC Limited, suggests a balanced approach to gold investment. He recommends a calibrated exposure of 10-15% of a diversified portfolio, depending on individual risk profiles. This strategy can enhance resilience without resorting to concentrated bets during periods of short-term volatility.
Conclusion
The landscape for gold and silver remains dynamic, influenced by macroeconomic factors and investor sentiment. While recent declines may raise concerns, the long-term outlook for these precious metals remains positive. As always, investors are encouraged to consult certified experts before making any investment decisions, ensuring that their strategies align with their financial goals and risk tolerance.
Disclaimer: This article is for educational purposes only. The views and recommendations expressed are those of individual analysts or broking companies, not Mint. Always consult with certified experts before making investment decisions.
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