Silver ETFs tumble as oil surge, inflation concerns weigh on metals

Silver prices fell significantly during Friday's trading session, with exchange-traded funds tracking the metal sliding up to 5 per cent as broader market headwinds intensified. Gold, considered the traditional inflation hedge, was not immune to the selloff, declining 2 per cent intraday, while silver fell 1 per cent during the same period.

The decline in precious metals came amid a sharp surge in crude oil prices, which typically signals rising inflation expectations. Higher energy costs can erode real returns on non-yielding assets like bullion, prompting investors to reassess their portfolio allocations toward commodities and equities that may benefit from inflationary pressures.

Market analysts attribute the weakness to conflicting signals about the inflation trajectory and monetary policy outlook. While elevated oil prices suggest persistent cost pressures, uncertainties around central bank actions and global economic growth have created volatility across asset classes, including precious metals markets.

The two-session downturn marks a reversal in sentiment for bullion, which has typically gained during periods of economic uncertainty. Investors in India, where silver and gold remain popular as both investments and cultural assets, are closely monitoring these price movements as they assess precious metals' role in their portfolios.