Despite the massive IT selloff in stock markets today, gold and silver ETFs tumbled as much as 6 percent as safe-haven demand weakened. Experts believe exposure to precious metals like gold and silver has been reduced as worries over geopolitical concerns in West Asia have subsided for now. A stronger US dollar and indications suggesting the US Fed will keep interest rates higher for a while also hurt bullion rates. The decline in spot gold and silver rates led to a decline in ETF valuations as well, therefore hurting investors.
Analysts believe the decline in gold and silver ETFs is also showing a shift in patterns altogether, for instance it is showing investors are moving away from safe-haven bets as geopolitical worries ease and investors are reassessing or calculating risk factors altogether. Gold prices gained significantly when tensions were rising during the West Asia war, however now the decline is showing the shift away from those risk-premium gains. However, experts remain bullish on the bullion in the long-term.
According to some experts, silver ETFs are set to witness a bigger decline as compared to gold ETFs as silver they believe is more volatile and not viewed from the safe-haven angle as much. They believe gold is viewed more of a safe-haven bet, especially during rising uncertainty where as silver demand is linked to industrial activity and demand. Sectors like electronics, energy, electric vehicles, manufacturing all account for and contribute to silver demand. While investors remain concerned about global growth and the reduced exposure on previous metals, silver rates react more sharply and sometimes more rapidly than gold, and this difference reflects in silver ETFs versus gold ETFs as well.
The weakness in precious metals and ETF results is taking place at the same time as the weakness in equities and some experts believe that is reflecting the need for a cautious approach going ahead.
Gold, Silver ETFs Tumble Up To 6% As Safe-Haven Demand Weakens Despite IT Selloff
