Silver ETFs Tumble Up to 21% as Bullion Futures Slide; Profit Booking and Higher Margins Weigh on Prices
Silver exchange-traded funds (ETFs) witnessed sharp losses on Thursday after silver futures opened significantly lower on the Multi Commodity Exchange (MCX), snapping a two-day recovery rally. Weakness in bullion prices, aggressive profit booking, and higher margin requirements combined to drag the white metal and related funds sharply lower.
According to market data, silver ETFs declined by as much as 21% during the session. Axis Silver ETF fell to an intraday low of ₹216.86 from its previous close of ₹275, marking a steep drop of around 21%.
Other major silver ETFs—including HDFC Silver ETF, ICICI Prudential Silver ETF, Edelweiss Silver ETF, SBI Silver ETF, and Kotak Silver ETF—registered losses ranging between 12% and 17%.
Safe-haven demand eases amid geopolitical developments
The selloff followed reports of potential diplomatic talks between the US and Iran scheduled in Oman on Friday, which weakened safe-haven demand for precious metals. This development triggered fresh profit booking after a brief rebound earlier in the week.
A stronger US dollar also weighed on bullion prices, making precious metals less attractive for investors.
Silver and gold prices fall after brief recovery
Silver prices on MCX declined nearly 9% to an intraday low of ₹2,44,654 per kg, while gold prices slipped about 3% to ₹1,48,455 per 10 grams. The fall erased gains from the previous two sessions, which had followed a sharp correction earlier.
Between January 28 and February 2, spot silver prices had fallen nearly 32%, while gold dropped about 13%. Although both metals recovered modestly in the subsequent sessions, Thursday’s trade saw selling pressure return.
According to reports, last Friday’s heavy selloff was triggered by news that US President Donald Trump would nominate Kevin Warsh as the next Federal Reserve chair, unsettling global commodity markets. As per Bloomberg, silver recorded its biggest single-day fall, while gold saw its sharpest decline since 2013.
Higher margins add pressure on bullion futures
Adding to market stress, MCX announced an increase in margin requirements following a periodic risk review. An additional margin of 4.5% on silver futures and 1% on gold futures across all variants came into effect from February 5, 2026. The higher margins forced leveraged traders to cut positions, accelerating the price decline.
What should investors do now?
Market experts expect silver prices to remain volatile and trade within a consolidation range of $74 to $91, roughly translating to ₹2,35,000 to ₹2,85,000 per kg. A breakdown below $74 could push prices toward $69, or around ₹2,20,000.
NS Ramaswamy, Head of Commodity & CRM at Ventura, said steep corrections in gold and silver were driven by overextended positions and a rebound in the US dollar. He noted that higher margin requirements played a key role in forcing liquidation, particularly in silver.
While near-term volatility is likely to persist, analysts believe the long-term bullish outlook for gold remains intact, supported by central bank buying, diversification trends, and ongoing macroeconomic and geopolitical risks. Central banks purchased around 230 tonnes of gold in Q4 2025, with demand expected to remain strong through 2026.
In the short term, experts advise investors to follow a buy-on-dips and sell-on-rallies strategy, keeping position sizes conservative amid elevated volatility.
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