Gold and silver ETFs fell by up to 4% on Monday as precious metal prices opened sharply lower on the Multi-Commodity Exchange (MCX). The decline was largely driven by a stronger U.S. dollar, which put pressure on dollar-denominated bullion prices.

At the same time, a rise in energy prices intensified inflation concerns, dampening expectations of near-term interest rate cuts. These factors combined outweighed the safe-haven demand that had emerged amid the ongoing conflict in the Middle East.

Also Read | Explained: How Sebi’s new rule allowing mutual funds to hold more gold and silver may impact investors

Among the 27 gold ETFs, Nippon India Gold ETF fell the most, dropping around 4%, followed by Axis Gold ETF, which declined 3%. The Wealth Company Gold ETF slipped about 2%, while the remaining funds were largely flat.

Among the 18 silver ETFs, the Tata Silver ETF recorded the steepest decline of around 3%. ICICI Prudential Silver ETF and Bandhan Silver ETF dropped about 2% each, while the others fell around 1% or remained flat.

Abhishek Bhilwaria, Bhilwaria MF, AMFI registered MFD shared with ETMutualFunds that In the current market, gold and silver are undergoing a moderate correction following record-breaking peaks earlier this year, with 24K gold hovering around Rs 1,63,630 per 10 grams and silver at approximately Rs 2,84,900 per kilogram.

For investors, the consensus is to use these price dips as a strategic entry point by accumulating metals through a staggered, SIP-style approach rather than making lump-sum purchases, he further said.

Maintaining a balanced exposure of 5–15% in precious metals to hedge against ongoing geopolitical tensions and shifting interest rate cycles is what Bhilwaria said.

MCX Gold futures due April 2026 were down by over Rs 1,808 or 1.1% to Rs 1,59,826 per 10 grams. Meanwhile, silver futures for May 2026 delivery dropped by Rs 3,538or 1.3% to Rs 2,64,747 per kg.

In the international market, spot gold slipped 1.7% to $5,082.51 per ounce as of 0233 GMT. U.S. gold futures for April delivery were also lower, falling 1.4% to $5,099.40 per ounce.

The U.S. dollar climbed to its highest level in more than three months, making gold more expensive for buyers using other currencies and dampening demand for the precious metal. Silver prices also moved lower, with spot silver declining 2.2% to $82.50 per ounce.

Also Read | Quant Small Cap Fund adds HDFC Bank, ICICI Bank and 5 others, reduce stake in Jio Financial and 3 more

Manoj Kumar Jain of Prithvi Finmart said both gold and silver are currently witnessing sharp price swings, leading to heightened volatility in the precious metals market. He expects prices of both metals to remain volatile in the near term due to fluctuations in the dollar index, the ongoing U.S.-Iran conflict and uncertainty in global financial markets.

Jain advised traders to operate within these ranges and adopt a buy-on-dips strategy. For long-term investors, he suggested accumulating gold and silver gradually during price corrections.

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

If you have any mutual fund queries, message on ET Mutual Funds on Facebook/Twitter. We will get it answered by our panel of experts. Do share your questions on ETMFqueries@timesinternet.in alongwith your age, risk profile, and twitter handle.