Silver ETFs experienced a brutal selloff, with most funds declining 4-5% as MCX and COMEX silver slid near 2026 lows on Fed rate hike fears and a stronger dollar. MCX silver for July 2026 contract was quoted at ₹2,26,850 per kg, down 3.18%, while COMEX silver lost about 4% to trade at $62.59 per troy ounce, hitting the lowest point the precious metal has reached in 2026. Gold ETFs were also lower but the decline was much milder, with Invesco India Gold ETF down 1.96% at ₹125.20 per 10 grams. The broad-based selloff across silver ETFs reflects intense investor anxiety over rising expectations of a US Federal Reserve rate hike and the stronger US dollar weighing on precious metals sentiment. With today's fall, silver has now erased over 10% since last week's Federal Reserve meeting, representing a significant decline from recent highs.
Market participants are now closely watching the US Federal Reserve's policy outlook, with traders pricing in nearly a 90% probability of a rate hike in December according to the CME FedWatch Tool, sharply higher compared to expectations before last week's Fed meeting. Traders now see an 86% probability of a rate hike by December, up from 61% before last week's Fed meeting, as reported by LiveMint. Fed Chairman Kevin Warsh is scheduled to deliver his first congressional testimony on monetary policy on July 14, which investors expect could provide further clarity on the central bank's future stance. Higher interest rates generally pressure gold and silver as they increase the opportunity cost of holding non-yielding assets. The dollar index strength is primarily attributed to traders weighing in at least one rate hike by the central bank in 2026 over mounting inflationary concerns, with nine of 19 US Federal Reserve officials forecasting at least one rate hike for later in the year to battle inflationary pressures. Most market experts believe that investors are watching out for this week's US PCE inflation report, which is the US Fed's preferred measure of inflation and could potentially offer investors cues with regard to the direction of interest rates for the rest of the year.
Silver prices, which are generally more volatile than gold, declined sharply by $4.05 per troy ounce to a low of $61.53, marking their lowest level since late March. The latest decline has extended silver's June losses to 18%, putting it on track for its biggest monthly drop since March, when it plunged 20%. From its January peak of $121.78 per ounce, the white metal has now corrected nearly 50% based on Tuesday's low. MCX silver July 2026 futures were 3.18% down at ₹2,26,850 per kg, while MCX gold August 2026 futures were 1.21% lower at ₹1,46,320 per 10 grams around 9:10 am on Tuesday, reflecting the same downward pressure seen in international markets. With Tuesday's decline, silver's month-to-date losses widened to 15%, wiping out all the gains recorded in May. The domestic decline mirrors the international trend, with profit booking in precious metals being the primary driver of the selling pressure across both international and domestic markets.
The selloff across Silver ETFs was broad-based, with most funds declining 4-5% during the session. HDFC Silver ETF was the worst hit, falling 4.93% to ₹214.26, while Nippon India Silver ETF was down 4.70% at ₹214.55. Other major funds including Tata Silver Exchange Traded Fund at ₹21.79, down 4.72%, Groww Silver ETF at ₹22.00, lower by 4.56%, and Zerodha Silver ETF at ₹22.79, down 4.44% also witnessed significant declines. Among gold ETFs, the decline was much milder, with Groww Gold ETF down 1.68% at ₹14.08 and ICICI Prudential Gold ETF lower by 1.71% at ₹123.27. The broad-based weakness across both silver and gold ETFs demonstrates the intense investor anxiety over Fed rate hike expectations and dollar strength impacting precious metals sentiment. Silver ETF outflows have been persistent, amplifying the decline alongside rapid deleveraging in silver futures and futures deleveraging that triggers forced liquidation.
Silver is now trading near its 2026 lows around $60 per troy ounce, representing a nearly 50% washout from the highs seen in late January when it rallied as much as $120 per troy ounce. According to The Financial Express, Kotak estimates $56-59 as the key near-term support zone for silver, with spot silver support seen at $55-59 and resistance at $67 and $72. On MCX, support is placed at ₹2,22,780 per kg and then at ₹2,02,000 per kg, while resistance stands at ₹2,53,800/kg and ₹2,72,000/kg. Navneet Damani from Motilal Oswal Financial Services noted that the safe haven narrative has taken a back seat to easing tension in the Middle East and progress in US-Iran negotiations, while Kaynat Chainwala from Kotak Securities explained that the metal carries no yield, so when real yield expectations climb and the dollar strengthens, the cost of holding silver rises with every basis point. Peter McGuire from Trading.com believes that the demand opportunity continues to remain the same citing industrial demand from electric vehicles and military technology, though he acknowledges the 60 dollars is a psychologically important level and the street is worried if it can fall below $59/US dollar levels seen last December.
