Silver ETFs tumble up to 8% as white metal falls below $70; gold ETFs down 3%: What lies ahead?

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A dramatic unwind which hit gold and silver markets recently has erased a chunk of their record breaking January gains.

Gold, silver etfs fall

Silver ETFs plunged as spot prices fell below $70/oz; gold ETFs also declined
CME margin hikes and Fed chair nomination triggered selloff in precious metals
Analysts expect silver demand and supply deficits to support prices long-term

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Silver exchange traded funds (ETFs) crashed in trade on February 6, as the spot prices of the white metal fell below the key psychological mark of $70 per ounce on Comex. Gold ETFs also fell, although less sharply that those of silver.

Silver futures with March expiry on the Multi Commodity Exchange of India (MCX) dropped around 6 percent in the early trading hours of Friday to trade at Rs 2.29 lakh per kilogram. The futures have now dropped around 45 percent in around a week since hitting a lifetime high of Rs 4.2 lakh per kilogram earlier last week.

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Silver futures with May expiry meanwhile fell around 4 percent to Rs 2.42 lakh per kilogram. Gold futures were also down on MCX.

Silver ETFs tumble:

Edelweiss Silver ETF was down more than 8 percent to trade at Rs 232.66 apiece, as seen at 9.20 am. Aditya Birla Sun Life Silver ETF was down nearly 8 percent, while SBI Silver ETF, HDFC Silver ETF, Zerodha Silver ETF, UTI Silver ETF, Tata Silver ETF, ICICI Prudential Silver ETF and Nippon India Silver ETF were down around 7 percent each.

Axis Silver ETF, Kotak Silver ETF, DSP Silver ETF, Motilal Oswal Silver ETF, Mirae Asset Silver ETF, 360 ONE Silver ETF and others were down around 6 percent each.

Among the gold ETFs, Motilal Oswal Gold ETF dropped around 3 percent, while ICICI Prudential Gold ETF, DSP Gold ETF, UTI MF Gold ETF and others fell around 2 percent each.

Why are silver prices crashing?

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A dramatic unwind which hit gold and silver markets recently, erased a chunk of their record breaking January gains. The plunge began after CME Group hiked margin requirements on both metals, forcing leveraged traders to liquidate positions and accelerating a wave of selling. In additions, the selloff intensified as markets digested that US President Donald Trump nominated Kevin Warsh—viewed as a hawkish, dollar supportive choice—as the next Federal Reserve Chair. The shift revived expectations of tighter policy and triggered a sharp rebound in the U.S. dollar, which is negative for precious metals.

Silver has had an extraordinary run in 2025, surging roughly 50–60%+ year-to-date on industrial demand, supply deficits, and safe-haven flows.

“Markets often see sharp corrections after such extended rallies. Broader risk sentiment and geopolitical cues can prompt profit booking in commodities, especially where positioning has been crowded,” said Nirpendra Yadav, Senior Commodity Research Analyst at Bonanza.

What lies ahead?

Industrial demand for silver remains strong and tight supply environment and deficits persist globally, which supports price stability over the medium-to-long run despite volatility, the analyst added. He explained that a sharp fall in silver on intraday basis does not shape the long-term view.

Ross Maxwell, Global Strategy Operations Lead at VT Markets that the trade deal between India and US can lead to a shift towards increasing trade engagement which can improve risk appetite, ease supply-chain frictions, and reduce inflationary pressures linked to tariffs. “In relation to this announcement, gold and silver prices will be looking to balance between lower trade tensions and persistent macro uncertainty. A clearer trade outlook can reduce risk aversion, which will limit upside moves in precious metals,” he said.

“Gold remains well supported by ongoing concerns around inflation, currency stability, and geopolitical risks, keeping it attractive as a strategic hedge rather than a short-term trade,” Maxwell said.

According to the analyst, silver, while also a safe-haven asset, has the additional role in industrial demand, meaning improved global trade expectations can support prices through stronger manufacturing.

“While the tariff reduction may slow down fear-driven buying, both gold and silver are likely to stay structurally firm as long as economic and policy uncertainty remains,” Maxwell concluded.

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