Silver ETFs Slide Sharply as Silver Prices Drop Below $70 Mark

Silver ETFs came under heavy pressure on February 6 after silver prices slipped below a key psychological level. The fall was sharp, sudden, and widespread, leaving both commodity markets and ETF investors rattled in early trade.

While gold ETFs also moved lower, the damage was clearly deeper on the silver side as prices reversed sharply after a strong run.

Market Performance: Silver Takes a Hard Hit

The weakness in silver prices showed up quickly across domestic commodity markets.

• Spot silver slipped below $70 per ounce on Comex, triggering selling pressure
• Silver futures (March expiry) on MCX fell nearly 6% to ₹2.29 lakh per kg
• From last week’s peak of ₹4.2 lakh per kg, prices have dropped about 45% in just one week
• Silver futures (May expiry) declined around 4% to ₹2.42 lakh per kg
• Gold futures on MCX were also trading lower, though losses were smaller compared to silver

The speed of the fall stood out more than the fall itself. A week ago, silver prices were riding near lifetime highs. Today, the tone has flipped completely.

Silver ETFs Tumble Across the Board

The sharp move in silver futures directly impacted Silver ETFs, with several funds recording steep intraday declines.

Silver ETFs Down 7–8%

• Edelweiss Silver ETF fell over 8% to ₹232.66
• Aditya Birla Sun Life Silver ETF slipped nearly 8%
• SBI Silver ETF, HDFC Silver ETF, Zerodha Silver ETF, UTI Silver ETF,
  Tata Silver ETF, ICICI Prudential Silver ETF, Nippon India Silver ETF — all dropped around 7%

Silver ETFs Down Around 6%

• Axis Silver ETF
• Kotak Silver ETF
• DSP Silver ETF
• Motilal Oswal Silver ETF
• Mirae Asset Silver ETF
• 360 ONE Silver ETF, among others

The selling was broad-based. No major Silver ETF escaped the downturn.

Gold ETFs Also Slip, But Less Severely

Gold ETFs moved lower as well, though the losses were milder compared to silver.

• Motilal Oswal Gold ETF declined around 3%
• ICICI Prudential Gold ETF, DSP Gold ETF, UTI MF Gold ETF, and others fell close to 2%

This divergence highlighted how silver remained more vulnerable during the sell-off.

Main News: What Triggered the Sharp Fall in Silver Prices?

The recent decline followed a strong rally earlier in the year. A sharp unwind wiped out a significant part of January’s gains in both gold and silver markets.

Several global developments came together at the same time:

• CME Group increased margin requirements on gold and silver
• This forced leveraged positions to unwind quickly
• Selling pressure accelerated as traders exited crowded positions
• The U.S. dollar strengthened sharply
• A shift in global policy sentiment weighed on precious metals overall

Silver, which had surged around 50–60% year-to-date, faced heavier selling as the correction picked up pace.

Company Details: Why Silver ETFs Reacted Strongly?

Silver ETFs directly track silver prices. When spot and futures prices fall sharply, ETF prices adjust almost instantly.

A few factors amplified the reaction:

• The recent rally had pushed silver prices close to record levels
• Positioning across silver-linked instruments had become crowded
• The speed of the decline left little room for gradual adjustment

As a result, Silver ETFs reflected the price fall in real time, leading to sharp single-day declines.

Summary: Silver ETFs Face Sudden Volatility

To sum it up:

• Silver prices dropped below $70 per ounce, triggering widespread selling
• Silver futures on MCX fell between 4% and 6% in early trade
• Prices declined nearly 45% from last week’s lifetime high
• Silver ETFs fell sharply, with losses ranging from 6% to over 8%
• Gold ETFs also slipped, though to a lesser extent

The session marked a clear shift in momentum for silver and Silver ETFs after a powerful rally earlier this year. Price action remained volatile, with markets reacting quickly to global cues and changes in trading conditions

Source: Moneycontrol