Gold and Silver ETFs Plummet Up to 4% Amid Warsh's Hawkish Comments

A sharp decline in global precious-metal prices sent Gold and Silver ETFs plummeting up to 4% on August 31. The sell-off was triggered by hawkish comments from US Federal Reserve Chair Kevin Warsh, who reiterated that policymakers remain focused on bringing inflation back to the central bank's 2% target.

Warsh's remarks increased expectations of tighter US monetary policy and higher interest rates. This led to a surge in bond yields, which put pressure on gold and silver prices as they do not offer interest income.

The SBI Silver ETF fell 4.05%, while the Nippon India Silver ETF dropped 4.06%. The ICICI Prudential Gold ETF declined by 3.59% to ₹130.75, and the Tata Gold ETF was down 3.19% at ₹14.87.

Colin Shah, MD of Kama Jewelry, views the correction as a phase of consolidation rather than a structural downturn. He believes that consumers can take advantage of the volatile price environment during the festive season.