Gold, Silver Price Crash: How far can correction go and should you sell your ETFs? Experts weigh in

Gold and silver prices fell sharply in recent trading sessions, triggering caution among investors amid heightened volatility in the precious metals market. Market experts said the decline follows a strong rally and described the move as a natural correction, while advising investors to wait for lower levels before making fresh purchases.

Silver futures for March 5 witnessed a steep fall, declining by Rs 47,893, or 12 per cent, to Rs 3,52,000 in a single session. Gold futures for February 5 also moved lower, falling by Rs 8,503, or 5 per cent, to Rs 1,60,900 during the same period.

Experts term fall as expected after rally

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Market expert Anil Singhvi said the fall in gold and silver prices was expected after a prolonged rally. “After such a strong rise, a correction is natural. Investors should look for buying opportunities when prices come down further,” he said.

Singhvi noted that domestic gold prices are currently trading around Rs 1.65 lakh per 10 grams. He said a favourable buying level for gold would be closer to Rs 1.25 lakh per 10 grams. On silver, he added that a correction towards Rs 1.25–1.30 lakh per kilogram would offer a better entry point for investors.

Views on silver point to deeper correction

Another market expert, Sumeet Bagadia, shared a similar view on silver prices. He said silver needs a deeper correction before it becomes attractive for fresh buying.

“A strong correction is needed in silver. Prices may come down by 25–30 per cent from current levels. Investors should consider buying at these lower levels rather than entering the market at the current price,” he said.

Vikas Sethi also advised caution, particularly in silver. He said historical trends suggest that silver has already seen major upside movements and much of the potential gains have been absorbed. “I would avoid buying silver until prices reach the Rs 2.40–2.50 lakh range per kilogram,” he said.

Gold buying levels and holding strategy

On gold, Sethi said levels around Rs 1.40 lakh per 10 grams would be suitable for buying. He advised investors to hold their existing gold positions and avoid panic selling amid the current volatility.

“Gold ETFs and physical holdings should be maintained. Fresh purchases can be planned after a significant correction,” he said.

ETF prices reflect sharp fall

The sharp fall in metal prices was reflected in exchange-traded funds as well. Gold ETFs declined sharply, with most funds falling between 8 per cent and 11 per cent.

Tata Gold ETF slipped around 9 per cent, while Nippon India Gold BeES fell over 10 per cent. Zerodha, ICICI Prudential, SBI, HDFC, Kotak, Mirae Asset, UTI and DSP Gold ETFs also declined largely in the range of 9–11 per cent.

Silver ETFs saw even deeper losses compared with gold. Tata Silver ETF declined about 12.5 per cent, while Zerodha Silver ETF fell nearly 17 per cent.

Nippon India, ICICI Prudential, HDFC, Aditya Birla Sun Life and SBI Silver ETFs recorded losses ranging between 16 per cent and 20.5 per cent.

Outlook and advice for investors

Singhvi said the recent rally in gold and silver had pushed the market into an overbought zone. “The Relative Strength Index (RSI) for silver has crossed 90, which is extremely high historically. A correction of around 25 per cent is possible before prices stabilise,” he said.

Experts said investors should avoid rushing into the market during the current phase of volatility. Singhvi suggested that investors focus on equity markets for near-term opportunities and plan purchases in gold and silver after prices correct further.

“Equity indices may provide better returns in the near term. Gold can be accumulated systematically after the correction,” he said.

According to market experts, the ongoing correction in gold prices could bring rates down to Rs 1.10–1.25 lakh per 10 grams, while silver prices could decline to Rs 2.45–2.50 lakh per kilogram. These levels are seen as attractive entry points for long-term investors.

Market participants were advised to remain cautious and avoid panic selling. Experts said short-term volatility is a normal feature of commodity markets and stressed the importance of disciplined investing.

“Those who have invested in gold and silver already should hold their positions. Fresh buying should only be considered at lower levels,” Singhvi said.