Silver ETFs face the steepest correction, with several funds losing more than half their value from January peaks, while gold ETFs decline up to 26% amid a stronger US dollar, rising bond yields and uncertainty over the Federal Reserve’s policy outlook.

Gold and silver exchange-traded funds (ETFs) came under renewed selling pressure on Tuesday, October 27, as a sharp correction in international bullion prices weighed on precious-metal investments. According to National Stock Exchange (NSE) data, several silver ETFs have fallen more than 50% from their respective 52-week highs, while gold ETFs have registered declines of up to 26% from their January 2026 peaks.

The latest sell-off highlights the volatility that can affect precious metals even after a strong rally. Investors who entered gold and silver ETFs near their record levels are facing substantial mark-to-market losses, while market participants are reassessing the near-term outlook for bullion amid changing expectations around US interest rates, bond yields and the dollar.

Silver ETFs Lead the Decline as Selling Intensifies

Silver-linked exchange-traded funds have experienced the sharpest correction among precious-metal investment products. Several funds declined approximately 2% during Tuesday’s session, reflecting continued weakness in the underlying silver market.

DSP Silver ETF emerged among the worst performers, trading at ₹18.17 compared with its 52-week high of ₹39 recorded on January 29, 2026. This represents a decline of approximately 53.4% from its peak.

Kotak Silver ETF, UTI Silver ETF, Axis Silver ETF and Mirae Asset Silver ETF have also lost more than 50% from their respective 52-week highs. Meanwhile, HDFC Silver ETF, Edelweiss Silver ETF, SBI Silver ETF and Tata Silver Exchange Traded Fund have declined approximately 47–49% from their January peaks.

The scale of the correction demonstrates how quickly returns can reverse when investors move away from an asset following an extended rally. Silver’s price movements can be particularly volatile because the metal is influenced by both investment demand and industrial consumption.

Gold ETFs Also Face Significant Pressure

Gold ETFs have proved relatively more resilient than their silver counterparts, but they have not escaped the broader downturn.

Baroda BNP Paribas Gold ETF was among the weakest performers, trading at ₹135.40 against its 52-week high of ₹184, a decline of approximately 26%. DSP Gold ETF, Edelweiss Gold ETF, Tata Gold Exchange Traded Fund, Mirae Asset Gold ETF and Zerodha Gold ETF have fallen between 21% and 25% from their respective peaks.

During Tuesday’s session, several gold ETFs recorded more modest losses of approximately 0.2–0.4%, compared with declines of around 2% in several silver ETFs.

Although gold is traditionally regarded as a defensive asset during periods of economic or geopolitical uncertainty, its price can still fall when interest rates, bond yields or currency movements make competing investments more attractive.

ETF investors should also distinguish between the percentage decline from a fund’s highest recorded price and its actual return over their individual investment period. The outcome depends on the purchase price, transaction costs and the fund’s tracking performance.

Silver Falls to an 11-Month Low

International silver prices have suffered a particularly steep reversal. According to the market figures reported on Tuesday, silver was trading near $52.81 per ounce, its lowest level in approximately 11 months.

The metal has fallen more than 21% over the preceding two months and approximately 56.6% from its January 2026 record high of $121.76.

Silver’s dual role as an investment asset and an industrial commodity can amplify price fluctuations. Changes in investor sentiment may trigger sharp movements, while expectations regarding industrial demand and economic growth can add another layer of uncertainty.

The latest decline has placed silver-focused ETFs under considerable pressure, given their close relationship with movements in the underlying metal. However, the precise performance of each ETF may differ because of expenses, tracking differences, market liquidity and other fund-specific factors.

Gold Approaches the $4,000 Level as Bond Yields Rise

Gold prices have also weakened considerably, slipping towards the $4,000-per-ounce level during Tuesday’s trading session. The metal has declined approximately 29% from its reported January peak of $5,626.80.

The correction follows a period of elevated prices and has coincided with a rise in US Treasury yields. The yield on the 10-year US Treasury approached 5%, increasing the opportunity cost of holding gold, which does not generate interest or dividend income.

When government bond yields rise, investors may find interest-bearing securities more attractive relative to non-yielding assets. This can reduce demand for gold, particularly when higher yields are accompanied by a stronger US dollar.

According to market commentary cited during the session, gold lost more than 4% in the previous week as Treasury yields climbed. The subsequent price weakness has kept gold investors cautious despite the metal’s traditional role as a portfolio diversifier.

Federal Reserve Decision Remains a Key Market Trigger

Investor attention has shifted towards the US Federal Reserve’s upcoming policy announcement and the economic data scheduled for release later in the week.

Market expectations cited in the commentary point towards the Federal Reserve maintaining its policy rate within the 3.75–4% range at Wednesday’s meeting. However, investors will closely examine the central bank’s assessment of inflation, economic growth and the likely direction of interest rates in the coming months.

US third-quarter gross domestic product (GDP) data and personal consumption expenditures (PCE) inflation figures are also expected to influence expectations regarding the Fed’s December policy decision.

A stronger US dollar could continue to weigh on bullion by making dollar-denominated commodities more expensive for buyers using other currencies. Conversely, a softer dollar or a decline in bond yields could provide support if investors return to precious metals.

The direction of monetary policy expectations will therefore remain an important influence on gold and silver prices in the near term.

Analysts See Fragile Stabilisation, but Downside Risks Remain

Market experts have indicated that gold and silver futures are attempting to stabilise following the recent sharp sell-off, although any recovery remains vulnerable to fresh selling.

For gold, the $3,970–$4,000-per-ounce zone has been identified as an immediate support area, with the $3,900 level emerging as another point to monitor if selling pressure intensifies.

Silver’s near-term outlook remains cautious. A sustained move above $54 per ounce has been highlighted as an important condition for stabilisation, while prices below that level could leave the metal vulnerable to continued volatility.

These levels are market reference points rather than guaranteed floors or ceilings. Prices can move through technical support and resistance levels when economic data, currency movements or policy developments materially change investor expectations.

What the Correction Means for ETF Investors

The sharp fall in gold and silver ETFs is a reminder that precious metals are not immune to significant losses, even when they are used for diversification or protection against uncertainty.

Silver ETFs have experienced substantially larger declines than gold ETFs in the current correction. Investors should therefore avoid assuming that both metals carry the same risk profile or will respond identically to changes in economic conditions.

Before making investment decisions, investors may consider the following factors:

• Underlying metal prices: ETF performance is closely linked to movements in gold or silver prices, although tracking differences can occur.

• Interest rates and bond yields: Higher yields can reduce the relative appeal of non-yielding precious metals.

• US dollar movements: Currency fluctuations can influence international bullion prices and domestic returns.

• Investment time horizon: Short-term price corrections may have a different impact on investors with different financial goals and holding periods.

• Portfolio concentration: Heavy exposure to a single commodity can increase portfolio volatility.

• Risk tolerance and liquidity needs: Investors should assess whether they can withstand further declines without being forced to sell at unfavourable prices.

A steep fall from a record high does not automatically mean an ETF is undervalued or that a recovery is imminent. Any investment decision should consider the underlying market outlook, the investor’s financial objectives and the possibility of further losses.

Market Outlook

Gold and silver are entering a crucial phase as investors assess the Federal Reserve’s policy decision, US economic data, Treasury yields and the direction of the dollar. Silver remains under greater pressure following its steep correction, while gold’s ability to hold near the $4,000-per-ounce region could influence near-term sentiment across precious-metal ETFs.

A decline in bond yields or a weaker dollar could help support a recovery, but persistent yield pressure and expectations of tighter monetary conditions may prolong the correction. Investors should watch the key price levels identified by analysts while recognising that market conditions can change rapidly.

For Indian investors, international bullion prices, rupee movements and domestic market factors will all influence the performance of gold and silver ETFs. The recent declines underline the importance of diversification, position sizing and disciplined investment decisions rather than attempting to predict a market bottom.