India’s Silver ETFs experienced a 7% pullback after weeks of rapid gains, bringing prices closer to their Indicative Net Asset Value (iNAV). Experts view this not as a sign of weakness, but as a healthy market correction that aligns ETF prices with the underlying physical silver value.
For weeks, a combination of physical silver shortage and high investor demand pushed ETFs significantly above their true value. The recent cooldown reflects a recalibration toward fair market prices, giving investors a more rational entry point.
Why Prices Rose Rapidly
Global Rally in Early October
In early October 2025, global spot silver prices surged past $40 per ounce. This spike was driven by:
- Shortages in physical silver supplies
- Rising industrial demand for green technologies, including solar panels
The rapid surge created a frenzy among investors, both in India and abroad.
Silver ETFs Traded at a Premium
Because of the rush, Silver ETFs were selling for 5–10% more than the real value of the silver they actually held. In other words, investors were paying extra just because everyone wanted to buy at the same time.
Fund Houses Halt Fresh Investments
To prevent investors from buying at inflated prices, several mutual fund houses, including Tata Mutual Fund, SBI and Kotak temporarily paused new lump-sum investments in their Silver ETF Fund of Funds. This step was aimed at protecting investors during the extreme rally.
Market Correction – What Happened
The correction began when:
- Global physical silver supply stabilized
- Safe-haven demand eased
- Investor frenzy cooled
By October 20, 2025, most Silver ETFs had dropped up to 7%, normalizing the market. This pullback brought ETF prices back in line with fundamentals, reducing risk for long-term investors.
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What This Means for Investors
A Potential Buying Opportunity
For investors, the correction may signal a better entry point into silver ETFs. Prices are no longer artificially inflated, allowing those who missed the rally to invest at a fair value.
Arguments for a Healthy Correction
- Normalization of valuations: ETF prices now closely track their underlying assets, reducing risk of paying a premium-driven bubble.
- Strong long-term fundamentals: Silver demand remains robust, especially in industrial sectors like electronics and green energy technologies. Analysts believe dips like this create attractive entry points.
- Structural supply deficits persist: Even though the recent shortage eased, global supply remains tight. According to the Silver Institute, the market is projected to experience a fifth consecutive year of deficit, supporting higher prices over the long term.
Points of Caution
- Volatility remains: Precious metals markets can swing sharply, and near-term volatility may continue.
- Negative momentum in technical charts: Some analysts caution that momentum indicators suggest further short-term declines.
- Potential further dips: Certain experts recommend waiting for silver to stabilize near ₹1,40,000 per kg before entering the market aggressively.
Silver ETFs Performance – Quick Snapshot
| Silver ETF Name | 1-Week Return (%) |
|---|---|
| 360 ONE Silver ETF | -6.9% |
| Aditya Birla Sun Life Silver ETF | -7.1% |
| Axis Silver ETF | -7.1% |
| DSP Silver ETF | -7.0% |
| Groww Silver ETF | -7.0% |
| HDFC Silver ETF | -7.1% |
| Aditya Birla Sun Life Silver ETF FoF – Direct Plan | -9.6% |
| Axis Silver FoF – Direct Plan | -11.4% |
| DSP Silver ETF FoF – Direct Plan | -10.7% |
Core ETFs dropped around -7%, while Fund-of-Fund variants saw steeper declines (-9% to -11%), reflecting higher sensitivity to premiums and inflows.
Silver Prices in 2025 and Beyond
Industry analysts remain optimistic on silver’s medium to long-term prospects:
- Consolidation expected between $50–$55 per ounce globally
- Potential peaks of $75 in 2026 and $77 in 2027 on COMEX
- Domestic silver prices could reach ₹2,40,000 per kg by end-2026, rising further to ₹2,46,000 in 2027, assuming USD/INR holds around 90–92
The combination of industrial demand, renewable energy growth and safe-haven appeal continues to support silver’s upward trajectory.
Conclusion
The 7% drop in Silver ETFs in October 2025 is a normal market adjustment, not a crash. The main ETFs are now trading close to their real value, the Fund-of-Funds have stabilized and the extra premiums are gone.
For investors, this could be a good time to buy, but some caution is needed because prices might move up and down in the short term. Silver is still a strong long-term investment thanks to industrial demand, growing use in renewable energy with limited supply.
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