Silver ETFs crash up to 21% as white metal prices fall again — Should investors stay away or buy the dip?

Silver exchange-traded funds (ETFs) saw steep declines on Thursday after silver futures opened sharply lower on the MCX, breaking a two-day winning run. Reports of upcoming US–Iran talks in Oman on Friday weakened safe-haven demand and led to aggressive profit booking across precious metals.

Additionally, a strong US dollar and an increase in margin requirements by MCX on silver futures also drove the white metal lower.

Silver ETFs witnessed up to 21% decline during the session. Axis Silver ETF dropped to an intraday low of ₹216.86 from the previous close of ₹275, marking a fall of about 21%.

Other funds, including HDFC Silver ETF, ICICI Prudential Silver ETF, Edelweiss Silver ETF, SBI Silver ETF and Kotak Silver ETF, fell between 12% and 17% during the day.

Silver and gold prices fall after short-lived recovery

Silver prices on MCX declined 9% in today's deals to an intraday low of ₹2,44,654 per kg. Gold prices also slipped around 3% to ₹1,48,455 per 10 grams. The fall came after prices had posted gains for two sessions beginning February 3.

The rebound earlier this week followed a sharp three-day correction, when prices dropped significantly despite no material change in underlying fundamentals.

Between January 28 and February 2, silver and gold spot prices had lost 32% and 13%, respectively. In the two sessions that followed, silver and gold recovered 11% and 6.5%, respectively. Thursday’s trade once again brought selling pressure back into the market.

According to reports, the trigger for last Friday’s heavy selloff was news that US President Donald Trump would nominate Kevin Warsh to lead the Federal Reserve, which unsettled global commodity markets. According to Bloomberg, silver recorded its biggest ever single-day fall on Friday, while gold registered its sharpest decline since 2013.

Adding to the pressure on gold and silver prices today, MCX imposed additional margins on bullion futures after a periodic risk review. An extra margin of 4.5% on silver futures and 1% on gold futures across all variants came into effect from the beginning of February 5, 2026.

Earlier this year, precious metals had rallied strongly on the back of speculative positioning, geopolitical tensions, and concerns over the independence of the US central bank.

What should investors do now?

Silver is expected to remain weak and trade in a consolidation band of $74 to $91, which translates to approximately ₹2,35,000 to ₹2,85,000. A breakdown below $74 could push prices toward $69, or around ₹2,20,000.

NS Ramaswamy, Head of Commodity & CRM at Ventura, said, “Steep pullbacks have been witnessed in Gold and Silver with acceleration to overextended levels. This has been supported partly by a rebound in the US Dollar.”

He added, “The damage caused to Silver was majorly on account of higher collateral requirements on hiking the margins, forcing traders to liquidate their positions, accelerating the price drop.”

He noted that the longer-term bullish momentum for gold remains intact due to structural diversification trends, persistent macroeconomic and geopolitical risks, and continued central bank buying. Central banks purchased 230 tons of gold in Q4 2025, and buying is expected to stay above 800 tons through 2026.

In the near term, traders are advised to adopt a buy-on-dips and sell-on-rallies approach as volatility is likely to remain elevated.

Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before making any investment decisions.