Gold and silver exchange-traded funds (ETFs) witnessed a notable correction on Thursday, mirroring a decline in global bullion prices that had recently touched two-week highs. The fall highlights the sensitivity of precious metals to macroeconomic signals, particularly interest rate expectations and geopolitical developments.

At around mid-session, silver ETFs saw sharper declines compared to gold. Nippon India Silver ETF dropped over 4 percent, while Tata Silver Exchange Traded Fund slipped by a similar margin. On the gold side, losses were relatively contained but still significant, with Tata Gold ETF, Nippon India ETF Gold BeeS, and ICICI Prudential Gold ETF falling between 2 percent and 2.2 percent.

The correction extended beyond ETFs into equities linked to the precious metals value chain. Hindustan Zinc, India’s largest silver producer, declined more than 3 percent, while its parent Vedanta also saw selling pressure, falling up to 2 percent. The move indicates that equity markets are quickly repricing earnings expectations in line with softer commodity prices.

Globally, the trigger for this decline was a reversal in gold prices after a brief rally. Spot gold fell about 2 percent, snapping a four-day gaining streak, while US gold futures dropped even further. This came despite heightened geopolitical tensions, which typically support gold prices.

The key shift came from macroeconomic signals rather than geopolitical risk alone. In a significant development, US President Donald Trump indicated that the United States would continue military operations in Iran over the coming weeks. While such escalation would usually boost safe-haven demand, the market reaction was counterintuitive.

Instead, the announcement led to a sharp rise in US Treasury yields and the dollar index. The 10-year US bond yield moved higher, signaling tighter financial conditions and reduced expectations of imminent rate cuts. Higher yields increase the opportunity cost of holding non-yielding assets like gold, leading to selling pressure.

Simultaneously, crude oil prices surged more than 6 percent on concerns about supply disruptions linked to potential strikes on Iran’s energy infrastructure. The spike in oil prices further complicated the macro outlook by raising inflation concerns, which could delay central bank easing cycles.