Investors in precious metals faced a turbulent start to the week as gold and silver Exchange-Traded Funds (ETFs) witnessed a sharp sell-off, with some silver instruments crashing nearly 20% on Monday, March 23, 2026. This dramatic downturn in what are traditionally considered “safe-haven” assets comes as the West Asia conflict enters a volatile new phase, pushing Brent crude prices well above $110 per barrel following threats to the Strait of Hormuz. While geopolitical instability usually drives investors toward gold, the current “oil shock” has flipped the script. Surging energy costs have intensified global inflation fears, leading markets to anticipate that central banks, including the US Federal Reserve, will maintain high interest rates for longer to combat rising prices. Since gold and silver do not provide interest or dividends, they become less attractive to hold when bond yields and interest rates are expected to stay elevated, triggering a broad-based liquidation across the metals complex.
The impact was felt most acutely in the silver segment, where the Kotak Silver ETF plummeted 20%, while others like the Axis and Bandhan Silver ETFs slipped over 11%. Gold ETFs were not spared either, with most shedding between 6% and 9% in a single session. Analysts point out that the crash was further exacerbated by “margin calls” and forced liquidations; as equity markets tumbled simultaneously, many institutional investors were forced to sell their liquid gold and silver holdings to cover losses elsewhere in their portfolios. Additionally, the US dollar has strengthened significantly as a result of the crisis, making dollar-denominated metals more expensive for international buyers and further dampening demand.
For retail investors, market experts advise against panic-selling during this period of extreme volatility. Despite the current correction, the fundamental long-term drivers for precious metals—such as central bank diversification and their role as a hedge against currency devaluation—remain intact. Financial advisors suggest that investors should stick to their Systematic Investment Plans (SIPs), which allow for “rupee-cost averaging” by accumulating more units at these lower prices. While the short-term outlook remains “bumpy” due to the unpredictable nature of the US-Iran-Israel conflict, maintaining a disciplined 10–15% allocation to precious metals is still recommended as a strategic buffer against systemic risks. For those with extra liquidity, this dip may even offer a tactical entry point, provided they avoid trying to “time the bottom” of this fast-moving market.
