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Gold and silver exchange-traded funds (ETFs) witnessed a sharp sell-off of up to 10% on January 22, 2026, triggering concern among investors. The steep fall was recorded on the National Stock Exchange (NSE), even as losses in the futures market remained relatively limited. The key question now is whether this decline signals deeper trouble ahead or is merely a short-term correction after a strong rally.

ETFs Turn Red After Months of Strong Rally

Almost all gold and silver ETFs ended the session in the red, reversing a portion of the gains accumulated over the past few months. The sudden correction came as a surprise to many retail investors who had entered these instruments during the recent rally in precious metals.

Among gold ETFs, Tata Gold ETF declined by 8.54%, while Axis Gold ETF fell 8.47%. The steepest fall was seen in BSL Gold ETF, which dropped nearly 9.53%, reflecting heavy selling pressure across the segment.

Silver ETFs See Even Sharper Declines

The sell-off was more pronounced in silver-linked ETFs. Tata Silver ETF plunged around 13.6%, making it the worst performer of the day. Other funds also recorded significant losses, with Silver Price ETF down 11.18%, Edelweiss Silver ETF slipping 9.62%, and Mirae Asset Silver ETF falling 9.39%.

The sharper correction in silver ETFs indicates aggressive profit booking, as silver had outperformed gold during the earlier phase of the rally.

Futures Market Shows Limited Damage

Interestingly, the correction in ETFs was not fully reflected in the futures market. On the Multi Commodity Exchange (MCX), gold futures for February delivery slipped only 0.77%, while silver futures for March delivery declined by around 1.2%.

Around mid-afternoon, gold futures were trading near ₹1,51,557, while silver futures hovered around ₹3,19,843. This divergence between ETF prices and futures rates raised questions among investors about the nature of the fall.

Why Did Gold and Silver ETFs Fall So Sharply?

According to Amar Ranu, investment expert at Anand Rathi Share and Stock Brokers, the sharp fall in ETFs brought their prices closer to domestic physical and international market prices.

He explained that several factors contributed to the decline:

• Easing global geopolitical tensions

• Profit booking after a strong rally

• Reduced investor appetite for volatile metals

As a result, ETFs that were trading at a premium saw sharper corrections.

Understanding the Difference Between ETFs and Physical Metals

Market experts point out that investing in ETFs is not the same as holding physical gold or silver. Under normal conditions, ETFs closely track metal prices. However, during periods of high volatility, ETF prices can move significantly above or below the actual metal value.

This mismatch becomes more visible when investors rush to sell ETFs at the same time, leading to exaggerated price movements.

What Should Existing Investors Do?

Piyush Jhunjhunwala, Founder and CEO of Stockify, believes the current fall reflects short-term volatility rather than permanent value erosion.

He noted that sharp corrections are common after strong rallies, especially when global sentiment shifts. Such movements are typical in commodity-linked investments and should not automatically be seen as a warning sign.

Why ETF Losses Appear Larger

ETF prices tend to fall faster when selling pressure intensifies, even if futures prices remain relatively stable. Investors who bought ETFs at a premium over the last 6–8 months may feel the impact more acutely.

However, the ongoing correction appears to be aligning ETF prices more closely with actual metal prices, which some experts see as a healthy adjustment.

Real Risk for ETF Investors

Prasenjit Paul, equity research analyst and fund manager, cautions that the real risk lies not in short-term price drops but in the illusion of stability ETFs create.

Precious metals are inherently volatile, but ETFs make them trade like stocks. This can lead investors to react emotionally to daily price movements, especially if they lack a clear asset allocation or exit strategy.

Long-Term Strategy: What Experts Recommend

Experts suggest that long-term investors should avoid lump-sum investments during volatile phases. Amar Ranu recommends using SIP or STP routes for silver ETFs, given silver’s strong structural demand in industry.

For gold, experts continue to view it as an important portfolio hedge. However, they advise that gold and silver together should ideally not exceed 10% of a diversified portfolio.

Bottom Line

The sharp fall in gold and silver ETFs on January 22, 2026, appears to be a temporary correction rather than a structural breakdown. While short-term volatility may continue, long-term investors are advised to stay focused on asset allocation, diversification, and disciplined investing.

As always, investment decisions should be made after consulting certified financial experts and aligning choices with individual risk profiles and financial goals.

Disclaimer: The views expressed by market experts are their own and do not constitute investment advice. Investors should consult certified advisors before making any investment decisions.