Silver ETF vs Physical Silver
Gold and silver exchange-traded funds (ETFs) on the NSE experienced sharp losses on January 22, 2026, with prices across the board falling, causing concern among existing investors.
Some of the largest decline among gold ETFs was seen in BSL Gold ETF, which dropped 9.53 per cent, followed by Tata Gold ETF at 8.54 per cent, and Axis Gold ETF at 8.47 per cent. Silver funds also declined significantly, with Tata Silver ETF down 13.6 per cent, the silver price ETF decreasing 11.18 per cent, Edelweiss Silver ETF dropping 9.62 per cent, and Mirae Asset Silver ETF falling 9.39 per cent, indicating a widespread sell-off in precious metal investments.
It is also worth noting that in the futures market, the fall was much smaller compared to ETFs. On the MCX, gold futures for February were down 0.77 per cent, while silver futures for March slipped 1.2 per cent. The opening gold price stood at Rs 1,51,557, while the silver price stood at Rs 319,843 around 15:00 PM today.
Amar Ranu, Head – Investment Products & Insights, Anand Rathi Share and Stock Brokers Limited, said, “Gold and Silver ETFs saw significant drawdowns today, as high as 20%, thereby bringing the ETF’s price almost in line with domestic physical and international market prices. (MCX prices of silver have dropped by 3% – 4%in comparison). This has come about due to some easing in global geo-political tensions, exacerbated by investors booking profits and moving away from the volatile metals.”
Investors should understand that ETFs are not equivalent to owning physical gold or silver. They tend to track closely in stable markets but can overshoot significantly during volatile times.
What existing investors should know
Piyush Jhunjhunwala, Founder & CEO, Stockify, says, “The drop-in gold and silver ETFs today is a signal of short-term market volatility and not of a loss of value that is permanent. Usually, after strong rallies, there are prophecies depending on which global sentiment is changing, and that often leads to sharp corrections.”
“Such movements are very common in commodity-linked investments, where prices are very sensitive to economic signals and quickly changing investor emotions,” added Jhunjhunwala.
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ETF prices can fall more sharply when investors rush to sell, even if the actual gold and silver prices in the futures market move only slightly.
For any existing investor, they might see drawdowns in their ETF holdings, especially if the investments were made in the past 6-8 months, where they may have got the ETF at a premium. What they may experience in today’s fall is that the ETF price is getting rationalised and more aligned with the actual market price of the metal.
Prasenjit Paul, Equity Research Analyst at Paul Asset & Fund Manager at 129 Wealth Fund, says, “What unsettles investors on days like this is not the fall in gold or silver, but the illusion of stability that ETFs create. Precious metals are volatile assets; ETFs make them feel tradable like stocks, encouraging investors to react to daily price moves. The real risk is owning them without clarity on allocation or purpose or without a proper entry-exit plan.”
For existing investors, this phase typically serves as a reminder to keep concentrating on long-term goals and not to react impulsively. “Those who have invested for diversification and stability should consider this as a temporary adjustment, not a crisis. Patience, portfolio balance, and disciplined investing are still valid and important over short-term market fluctuations,” said Jhunjhunwala.
Thus, when investing in either metal, one should have a long-term view on them before taking the plunge. Both metals, especially silver, have a history of price volatility.
“As such, today’s drawdown is nothing extraordinary. If one is truly thinking long term, we believe entry in silver ETFs should be done via SIP/STP instead of lumpsum, as the structural demand for silver across industries remains strong. For Gold, it remains an important asset allocation to take in the portfolio. Ideally, both metals in combination should not exceed more than 10% of your overall portfolio,” added Ranu.