Gold and Silver ETF Prices Decline:Gold and silver exchange-traded funds (ETFs) declined by up to 3% in trading on February 16, tracking a fall in underlying bullion prices amid profit booking and recent market volatility. The decline comes at a time when India’s market regulator is considering new measures to stabilise ETF pricing and reduce sharp swings in the segment.
ETFs Fall as Precious Metals Correct
Several silver-focused ETFs witnessed notable losses during the session. The Edelweiss Silver ETF experienced a decline of approximately 3% while the products from Bandhan and Kotak and Aditya Birla Sun Life and ICICI Prudential and SBI and Nippon India and Mirae Asset all faced a decline exceeding 2%.
The analysts reported that gold prices in early 2026 showed unstable behavior because international economic conditions and currency changes and investor behavior modifications triggered intense price fluctuations. The bullion price correction which happened recently occurred because market holidays and low trading volumes created conditions that allowed prices to change.
Gold and Silver ETF Prices Decline
Precious metal commodity ETFs experience different pricing problems which separate them from the difficulties that equity-based funds encounter. All over the world gold and silver markets function without interruption but Indian exchange traded funds only operate during domestic stock market hours.
Gold has given back some of Friday’s post-CPI gains today due to thinner trading conditions and a lack of fresh upside catalysts,” Reuters quoted Tim Waterer, KCM chief analyst, as saying. US markets are closed for the Presidents’ Day holiday, while markets in China are closed for the Lunar New Year holiday.
The price band mechanism which regulators utilize does not effectively handle sudden global price changes because it results in unexpected wide trading ranges and temporary price inaccuracies for ETF units.
SEBI Proposes Wider +/-20% Price Bands After Sharp Volatility in Gold and Silver ETFs
SEBI Proposes Measures to Reduce Volatility
The Securities and Exchange Board of India (SEBI) will assess existing ETF pricing rules through new circuit breaker systems and flexible pricing limits which will enable better alignment of ETF market prices with real-time changes in commodity prices.
The main propositions include
- For gold and silver ETFs the first trading day price limits start at approximately ±6% which will expand to ±20% after certain time intervals throughout the trading period.
- International market movements that exceed established daily limits will permit traders to increase their boundary relaxation.
- The current fixed limits for commodity derivative markets should be eliminated to establish proper ETF restrictions.
- The creation of a specific pre-opening time frame for commodity exchange-traded funds will provide an opportunity to determine their actual market value before regular trading hours start.
“In the near term, trading may remain two way as markets digest US policy signals and risk events. However, dips are likely to attract buyers, supported by resilient safe haven demand and slowing real yields. Overall, while short term consolidation or pullbacks are possible, the long term trajectory remains upward, not indicative of a major correction,” according to the analyst.
The implementation of these measures will decrease severe price fluctuations while improving market visibility and matching ETF valuations with actual market conditions.
