What causes silver to be more volatile than gold?

Silver is more volatile than gold because it functions as an industrial product with fluctuating demand and supply, and significant speculative trading impacts its futures prices.

What is the recommended investment strategy for precious metals during volatile phases?

During volatile phases, it is recommended to invest gradually rather than in lump sums and maintain a consistent allocation, typically 15-20% in precious metals like gold and silver.

Home / Business and Economy / Gold & Silver ETFs Rebound: Panic Selling Unfounded

Gold & Silver ETFs Rebound: Panic Selling Unfounded

Q: Why did gold and silver ETFs recover so sharply?

Gold and silver ETFs recovered sharply because the preceding "panic selling" was a misinterpretation of the market, as their underlying fundamentals remained strong and intact.

4 Feb

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Summary

Gold and silver ETFs recovered sharply after a significant sell-off.
Fund managers state that the panic selling was a misunderstanding of fundamentals.
Silver's higher volatility is attributed to its industrial demand and speculative trading.

Gold & Silver ETFs Rebound: Panic Selling Unfounded

Gold and silver Exchange Traded Funds (ETFs) demonstrated a strong recovery after experiencing a significant sell-off in recent sessions. Leading fund managers have indicated that the widespread "panic selling" was a misinterpretation of the market, as the core fundamentals of these metals remained intact.

On February 3, 2026, MCX silver futures for March 5 saw a 13.63% increase, settling at Rs 2,68,234 per kg. Simultaneously, gold futures for April 2 rose 5.70%, closing at Rs 1,52,200 per 10 grams. This rebound followed a period of heavy selling where sentiment turned negative despite no fundamental shifts.

The steepness of the decline, particularly in silver-linked products like Tata Silver ETF and HDFC Silver ETF, created an exaggerated impression of a market breakdown. However, fund managers clarified that ETFs are backed by physical gold and silver, and significant redemptions were not observed, with many investors using the dip to average positions.