Silver exchange-traded funds (ETFs) have witnessed a sharp correction of nearly 20%, dealing a blow to investors who were betting on the precious metal as a long-term multibagger. The sudden sell-off has raised concerns among retail and institutional investors, especially those who entered at higher levels during the recent rally.
Market experts point to a combination of global and domestic factors behind the decline. A stronger US dollar and expectations of tighter monetary policy have reduced the appeal of non-yielding assets like silver. Rising bond yields have also prompted investors to shift funds away from precious metals toward interest-bearing instruments.
Another key factor has been profit-booking after silver’s strong run over the past year. As prices climbed rapidly, many investors locked in gains, triggering a wave of selling across silver-linked ETFs. In addition, softening industrial demand concerns—particularly from sectors such as electronics and solar manufacturing—have added pressure, given silver’s dual role as both an investment and industrial metal.
In the Indian market, silver ETFs have mirrored global trends, with net asset values falling in line with international prices. Analysts note that heightened volatility in commodities has further amplified price swings, making silver ETFs more vulnerable to sharp corrections.
Despite the recent crash, some experts believe the long-term outlook for silver remains intact, supported by green energy demand and limited supply growth. However, they caution that short-term volatility may persist, advising investors to reassess their risk appetite and investment horizon before adding or exiting positions.
The sharp correction serves as a reminder that even popular commodity ETFs are not immune to market cycles, and multibagger expectations can quickly fade when global conditions turn unfavourable.