Silver and gold ETFs fall up to 4% ahead of Fed decision. What investors should do

Silver- and gold-based exchange-traded funds (ETFs) fell nearly 4% on Wednesday, tracking a mild decline in prices on the MCX. Investors remained cautious as they assessed the potential economic fallout of the Middle East conflict ahead of the upcoming U.S. Federal Reserve policy decision.

The near-term outlook for the yellow metal will hinge on the Federal Reserve’s forward guidance—particularly whether it signals a rate cut this year or opts to hold rates steady amid the evolving geopolitical backdrop.

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HDFC Silver ETF slipped the most, falling around 4% to hit a day’s low of Rs 233.14 against its previous close of Rs 241.61. Other ETFs in the category declined between 2% and 3%.

Aditya Birla Sun Life Gold ETF fell the most among gold ETFs on Wednesday, dropping nearly 3%, while others were down 1%–2%.

Anup Bhaiya, Founder of Money Honey Wealth Services, told ETMutualFunds that gold steadied around the $5,000 mark amid ongoing geopolitical and inflation uncertainties, while silver consolidated near $79–$80.
He added that this presents a strategic opportunity for investors to accumulate on dips, as both metals retain strong long-term upside potential in a volatile macro environment.
MCX silver futures for May 2026 were down Rs 1,995, or 0.8%, at Rs 2,51,118 per kg. Meanwhile, gold futures for April 2026 delivery declined Rs 336, or 0.2%, to Rs 1,55,649 per 10 grams. Markets are currently pricing in near certainty of a rate hold in the 3.5%–3.75% range.
In international markets, gold prices were largely steady on Wednesday. Spot gold slipped 0.1% to $5,000.77 per ounce as of 0243 GMT, while U.S. gold futures for April delivery also edged down 0.1% to $5,004.60. Spot silver declined 0.4% to $79 per ounce.

Abhishek Bhilwaria, an AMFI-registered MFD at BhilwariaMF, advised that investors should focus on disciplined, consistent investing rather than trying to time current market volatility. He recommended a balanced approach, prioritising large or flexi-cap funds for stability amid global geopolitical risks, while closely tracking U.S. Federal Reserve updates that could shape future trends.

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Love Shah, Partner & Principal Officer, ValueX Fund Managers LLP shared with ETMutualFunds that gold remained flat while silver declined close to 4%, with both metals showing a negative bias and higher-for-longer rate expectations and elevated oil prices capped gold, while slowdown concerns weighed on silver’s industrial demand.

Investors may use dips in gold for long-term allocation, though current conditions don’t justify overweight exposure to either metal, Shah further said.

(Disclaimer: Recommendations, suggestions, views and opinions expressed by experts are their own and do not represent the views of The Economic Times.)

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