Silver ETFs: Selloff extends; Zerodha, Groww, MOFSL, Tata, Nippon silver ETFs tank up to 19%; here's why

Silver and exchange-traded funds (ETFs) on Monday extended their recent selloff, plunging up to 19 per cent in Monday's trade, amid continued slide in silver prices. Silver futures on MCX for March 5 delivery plunged Rs 22,938 per kg, or 8.63 per cent, to Rs 2,65,652 per kg level in Monday's trade. Silver futures earlier dropped to a low of Rs 2,42,714. This is against a record high level of Rs 4,20,048 per kg, MCX data showed.  

Silver prices have been falling as the US President Donald trump selected Kevin Warsh as the next Fed Chairman. Investors reacted negatively because Warsh is considered more aggressive on interest-rate policy than earlier leaders, said Rahul Kalantri, VP Commodities at Mehta Equities.

"The decline was further supported by a stronger US dollar, higher Treasury yields, and upbeat US inflation data (PPI and core PPI). In India, no change in import duty in the Union Budget removed the domestic premium in bullion." he said 

This was reflected in ETFs. At 11 am, Tata Silver Exchange Traded Fund was down 19.15 per cent at Rs 22.25. Its indicative NAV stood at Rs 23.23. SBI Silver ETF was trading 14.98 per cent lower at Rs 220.41. Aditya Birla Sun Life Silver ETF declined 14.6 per cent to Rs 224.80. Its i-NAV stood at Rs 263.03. 
Groww Silver ETF tanked 16.17 per cent to Rs 216. Zerodha Silver ETF fell 15.41 per cent to Rs 22.60.  Nippon India Silver ETF slipped 15.69 per cent to Rs 212.88. ICICI Prudential Silver ETF tanked 14.05 per cent to Rs 226.59. Kotak Silver ETF dropped 17.38 per cent, HDFC Silver ETF 16.65 per cent and Motilal Oswal Silver ETF 16.02 per cent.

A strong dollar is weighing on precious metal prices. The dollar index, which tracks dollar movement against a weighted basket of six major currencies, stood at 97.24. Analysts noted there has been a rapid macro re-pricing. 

"MCX Silver futures are trading near critical structural levels  Rs 2,50,000-2,60,000  after surging to record highs near Rs 4,20,048. The rally has been sharp and extended, pushing momentum indicators into extreme overbought territory, leading to heat-led consolidation and rapid intraday pullbacks. However, the broader trend remains decisively bullish, with the steep rising channel intact and major EMAs providing strong dynamic support. The Rs 2,35,000-3,40,000 zone remains a critical base," said Ponmudi R, CEO of Enrich Money.

Dips continue to offer accumulation opportunities for positional participants, he said on silver.