Gold exchange-traded funds (ETFs) witnessed a sharp sell-off on Thursday, January 22, with several popular schemes sliding between 7% and over 10%, tracking a steep correction in domestic and global gold prices.
Among the worst hit were Tata Gold Exchange Traded Fund, which fell nearly 9.5%, Nippon India ETF Gold BeES, down over 8%, Axis Gold ETF, which declined close to 10%, HDFC Gold ETF, down around 8.5%, and Birla Sun Life Gold ETF, which slipped more than 10% in early trade. Other gold ETFs such as SBI Gold ETF, ICICI Prudential Gold ETF, Kotak Gold ETF and Zerodha Gold ETF also saw sharp cuts during the session.
The sharp correction in gold ETFs comes as domestic gold futures on the MCX dropped over 2%, while international gold prices retreated nearly 1% after hitting record highs earlier this week.
Why are gold ETFs falling today?
The primary trigger behind the decline is profit booking after gold’s strong rally. Gold prices had surged to record levels over the past few sessions, gaining more than 11% so far in 2026 after a stellar 64% jump last year. This prompted investors to lock in gains once near-term geopolitical risks eased.
Another key factor weighing on prices is cooling geopolitical tensions. Gold’s safe-haven appeal weakened after U.S. President Donald Trump softened his stance on Greenland and indicated that a “framework of a future deal” had been reached with European stakeholders. The reduced geopolitical uncertainty led to selling pressure across safe-haven assets.
Adding to the pressure, the U.S. dollar strengthened, with the Bloomberg Dollar Spot Index rising, making gold less attractive for non-dollar investors. Higher dollar strength typically exerts downward pressure on gold prices globally.
In the domestic market, gold ETFs mirrored the fall in MCX gold February futures, which slipped sharply in morning trade. While silver futures remained relatively resilient due to spot demand, gold bore the brunt of the sell-off.
Despite today’s sharp correction, the broader outlook for gold remains constructive. Global brokerages such as Goldman Sachs have reiterated a bullish long-term view, citing continued central bank buying, diversification by emerging market economies, and expectations of interest rate cuts by the U.S. Federal Reserve in 2026.
However, in the near term, analysts caution that volatility is likely to persist, especially after the steep run-up in prices. Gold ETFs, which closely track domestic gold prices, are expected to remain sensitive to movements in global bullion prices, currency trends, and shifts in geopolitical risk perception.
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