Gold & silver ETFs lose up to 9% in 1 month. Is it time to buy the dip or wait?

Thu Nov 20 2025

After witnessing a rally, gold and silver ETFs have experienced a sharp hit over the last month. Gold ETFs have offered a negative average return of over 6%, while silver ETFs have slipped nearly 9%.

Market experts recommend holding on to current investments and SIPs in gold or silver funds can help investors navigate these cycles by averaging across different market phases rather than trying to predict turning points.

Shweta Rajani, Head MF, Anand Rathi Wealth Management is of the opinion that when it comes to equity, any market dip can be viewed as a buying opportunity but Gold and silver behave differently because they are driven more by demand than earnings.

“During a dip, investors should adopt a wait and watch approach unless they are using these metals as a substitute for debt. In such cases, if the holding period is long term, the dip can still be considered a viable buying opportunity and Gold remains the only meaningful alternative to debt, while silver should not be viewed as a viable replacement or investment,” Shweta Rajani adds.

Another expert, Varun Gupta, CEO, Groww Mutual Fund the prudent approach to invest in precious metals is through a long-term, systematic approach rather than attempting to time short-term movements and any addition should be aligned with long-term goals rather than driven solely by short-term price swings. “A gradual rebalancing is recommended if the recent correction has pulled precious-metal weights below one’s intended allocation.”

In the last one month, on an average, gold ETFs lost 6.51% and there were 39 funds in the category who have completed one month of existence. Among these 39 funds, LIC MF Gold ETF FoF lost the most of around 7.91% in the last one month and LIC MF Gold ETF lost the lowest of around 5.33%

On the other hand, silver ETFs on an average lost 9.18% and there were 27 silver ETFs in the said time period. Among these 27 funds, Kotak Silver ETF lost the most of around 9.99% whereas DSP Silver ETF FoF lost the lowest of around 6.81%.

Kaustubh Belapurkar, Director – Fund Research, Morningstar Investment Research India recommends that investors should be mindful of not investing in gold and silver purely driven by recent price momentum and adding gold/silver to an extent of 10% to a typical 75%/25% equity and fixed income portfolio (by reducing the equity allocation) can help reduce the overall volatility of the portfolio. “Follow a systematic investing approach instead of investing at one go.”

Why are gold and silver ETFs down?

Gold funds and ETFs - Experts attribute this dip to several factors. Firstly, the softening in US–China trade tensions reduced some of the safe-haven demand of gold and Fed’s cautious stance on further rate easing also weighed on precious metal prices, which typically perform better in a low-rate environment. And recently, an up move dollar index also added pressure on prices and after a strong rally, profit-booking also led to some pullback in prices.

Domestically, the decline is heavily influenced by profit-booking on the MCX and in Gold and Silver ETFs after prices, like MCX Gold, surged to lifetime highs above Rs 1.34 lakh per 10g in October, which was followed by a sharp correction.

Silver ETFs - Experts say that silver ETFs were down because of the above said reasons but India saw an additional, local factor. A shortage of physical silver in the domestic market led to a temporary and somewhat overstretched surge in Silver ETF prices. As supply conditions normalized, this short-lived spike unwound, causing a sharper correction in NAVs compared to the underlying global price movement. Some silver ETFs, in particular, saw declines of up to 7.9% in a single day as high premiums eased and domestic festival demand tapered after Diwali.

In the current calendar year, gold ETFs have offered an average return of 57.25% and have offered up to 59.01% return by UTI Gold ETF. In the last one year, these funds gave an average return of 60.16%.

According to a note by Tata Mutual Fund, Gold ETF AUM of India stands at 11.3bn as of Oct 2025. For the month of Oct, Gold ETF flow is $849.8 million with holding stands 83.5 trillion and overall demand increased by 6.1 trillion.

Silver ETFs have offered an average return of 74.52% in the current calendar year so far with ICICI Pru Silver ETF offering the highest return of 76.03%. In the last one year, silver ETFs have offered an average return of 68.20% and HDFC Silver ETF gave the highest return of around 70.34%.

The note from Tata Mutual Fund said that additional positive safe-haven triggered demand fueled by the U.S. government shutdown, proposals to add silver to the U.S. list of critical minerals and rising interest from major buyers like Saudi Arabia and Russia. And together, these factors reinforce silver’s strong long-term outlook, making short-term dips an opportunity for accumulation of the “white metal.”

The gold to silver ratio came down to 80.66 in November 2025 from 82.20 in October 2025 indicating that silver is relatively under valued in comparison to gold.

Gupta recommends that while short-term predictions are always difficult, there is a positive outlook on both gold and silver over the long run and central banks have been consistently adding to their gold reserves.

He adds that silver, too, has a favourable structural outlook and it has been in a supply deficit for five consecutive years, with demand outstripping supply. Overall, both metals remain well-positioned as long-term allocations within a diversified portfolio.

Shweta Rajani believes that Gold and silver work best as long-term portfolio stabilisers rather than as primary wealth creators, especially when compared to equity.

After sharing the long term performance of nifty, gold and silver, Shweta Rajani adds that patterns reinforce that gold can act as a substitute for the debt portion of a portfolio, but it cannot compete with equity for long term growth and silver shows even weaker long term potential and does not justify a meaningful allocation for investors.

Source: https://economictimes.indiatimes.com/