Gold exchange-traded funds came under heavy selling pressure on Friday, January 30, as domestic gold prices corrected sharply after hitting record highs earlier this week. The decline in gold ETFs mirrored weakness in MCX gold futures and a broader pullback in global precious metal markets driven by profit booking and a stronger US dollar.
Among the major gold ETFs, ICICI Prudential Gold ETF fell 6.85% to Rs 142.82, emerging as the worst performer in the segment during the session. Nippon India Gold BeES also witnessed a sharp decline, sliding 6.68% to Rs 136.74 on the NSE. The losses marked one of the steepest single-day falls for gold ETFs in recent months.
The sharp correction in ETFs followed a decline in the underlying commodity. Gold futures on the Multi Commodity Exchange slipped over 4%, as traders moved to book profits after a strong rally that had pushed prices to all-time highs earlier in the week. Elevated domestic prices and stretched valuations contributed to the intensity of the sell-off.
On the global front, spot gold fell around 3.3%, according to ICE data, as the US dollar rebounded from recent lows. A stronger dollar typically weighs on gold prices, as the metal becomes more expensive for non-US investors, leading to reduced demand in the short term.
Another key factor behind the sharper fall in Indian gold ETFs was the compression of India’s premium over global gold prices. Domestic gold had been trading at unusually high premiums compared with international benchmarks. As global prices cooled, this premium began to unwind, amplifying losses in MCX prices and gold-linked ETFs.
Despite Friday’s sharp decline, gold remains significantly higher on a year-to-date basis, supported by geopolitical uncertainty, economic concerns, and strong investment demand. However, after an extended and rapid rally, short-term corrections and heightened volatility remain a feature of the market.
Disclaimer: The information provided is for informational purposes only and should not be considered financial or investment advice. Stock and commodity market investments are subject to market risks. Always conduct your own research or consult a financial advisor before making investment decisions.
