Silver markets saw sharp and uneven volatility on January 22, with silver exchange-traded funds (ETFs) plunging far more sharply than the underlying futures market. While Multi Commodity Exchange (MCX) silver futures fell about 4%, several popular silver ETFs corrected between 20% and 24%, underscoring a rapid unwinding of speculative premiums in the domestic market.
MCX silver futures slide on easing geopolitical risk
MCX silver futures declined to ₹3,05,753 per kg, pressured by a moderation in safe-haven demand and a firmer US dollar. The move followed signals of easing geopolitical tension after Donald Trump stepped back from fresh tariff threats and softened rhetoric around Greenland, prompting profit booking across precious metals. From recent all-time highs, MCX silver is now lower by nearly ₹30,000 per kg.
Silver ETFs bear the brunt
The correction in ETFs was considerably steeper than futures:
| Silver ETF | Decline (%) | Latest price |
|---|---|---|
| Tata Silver ETF | 24% | ₹25.56 |
| Edelweiss Silver ETF | 22% | — |
| Mirae Asset Silver ETF | 22% | — |
| 360 ONE Silver ETF | 21% | — |
| Nippon India Silver ETF | 20% | — |
Why ETFs fell much more than futures
Market participants say the divergence reflects a collapse of speculative premiums, not a deterioration in silver’s fundamentals. According to Harshal Dasani, Business Head at INVasset PMS, Indian silver had moved into premium territory ahead of the Union Budget, driven by expectations of possible import-duty changes.
In recent sessions, MCX silver outperformed COMEX sharply on budget-linked speculation. At its peak, Indian prices implied ~$107/oz, nearly $13 above COMEX (~$94/oz)—a gap largely sentiment-driven rather than backed by physical tightness.
ETF premium dynamics amplify selling
Despite the sharp fall, several silver ETFs are still trading at premiums to NAV. Those premiums built up on:
- Budget-related import-duty rumours
- Heavy speculative inflows
- Expectation-driven sentiment rather than physical fundamentals
Because ETFs price off domestic spot benchmarks while also reflecting investor flows and arbitrage, they tend to react faster when premiums unwind. Accelerated retail profit-taking can therefore push ETF prices down more sharply than MCX futures, which may stabilise sooner.
