Sharp Fall in Gold & Silver ETFs: What Really Happened on 22 January 2026?

Sharp Fall in Gold & Silver ETFs: What Really Happened on 22 January 2026?

Gold and silver Exchange Traded Funds (ETFs) witnessed a sharp correction on 22 January 2026, with some silver ETFs falling 6–13% in a single trading session.

At first glance, the fall appeared alarming. However, a closer look at the data revealed something unusual — gold and silver prices themselves declined only marginally.

This raises an important question:

If the metals didn’t crash, why did the ETFs fall so sharply?

The answer lies in how ETFs are priced.

Two Prices, One ETF

Every gold or silver ETF has two distinct prices:

1. NAV (Net Asset Value)
   This reflects the actual value of the gold or silver held by the ETF.

2. Market Price
   This is the price at which the ETF trades on the stock exchange.

Under normal conditions, the market price stays close to the NAV. But during periods of high demand, the gap between the two can widen.

Why the Gap Appeared

Gold and silver prices are discovered in large, deep global markets.

ETFs, however, trade on the stock exchange like shares, where prices are influenced by demand and supply.

Over the past few months, gold and silver delivered strong returns. As investor interest grew, ETFs became the preferred route for taking exposure.

This sudden surge in demand created a problem.

👉 ETF units are not created instantly. There is a creation process involving authorised participants.

When demand rises faster than new ETF units can be created, the ETF market price starts moving ahead of the actual metal price. This leads to ETFs trading at a premium.

What Is a Premium?

A premium simply means:

The ETF’s market price is higher than the value of the gold or silver it represents.

During rising markets, this often goes unnoticed. Investors focus on returns, not valuation.

But premiums are temporary. They survive only as long as investors are eager to buy immediately.

What Changed on 22 January?

Gold and silver prices stopped rising sharply.

Some investors decided to book profits.

As buying urgency faded:

• Selling pressure increased

• Liquidity improved

• Premiums collapsed

As a result:

• Silver prices fell slightly

• ETF premiums disappeared

The combined effect made ETF prices fall sharply, even though the underlying metal remained relatively stable.

This was not a destruction of value, it was price alignment.

ETF prices moved back toward their fair value, closer to NAV.

The Bigger Picture

ETFs are efficient instruments and track their underlying assets well over the long term.

However, in the short term, ETF prices can also reflect:

• Investor behaviour

• Market sentiment

• Temporary demand-supply imbalances

This episode was not about gold or silver failing.

It was a reminder that valuation matters, even in ETFs.

FAQs: Gold & Silver ETF Correction

Q1. Did gold or silver crash on 22 January 2026?

No. Gold and silver prices fell only marginally. The sharp fall was limited to ETF prices.

Q2. Why did silver ETFs fall 6–13% in one day?

Because ETF premiums collapsed along with a small fall in silver prices, leading to a sharper correction in ETF prices.

Q3. What is NAV and why is it important?

NAV reflects the actual value of the metal held by the ETF. Buying ETFs far above NAV can hurt short-term returns.

Q4. Are gold and silver ETFs risky?

ETFs are not risky by design, but buying them at high premiums can lead to short-term losses.

Q5. Is this loss permanent?

No. This was a valuation adjustment. ETF prices aligned back with the underlying metal value.

Q6. What should investors do going forward?

Always check whether an ETF is trading close to its NAV, especially during high-demand phases.

Bottom line:

Markets don’t just reward the right asset they reward buying it at the right price.