Silver drags commodity ETFs down up to 15% in March. What next for investors?

The downturn began with the widespread unwinding of leveraged positions as investors booked profits. The subsequent escalation in the US-Iran conflict pushed oil prices sharply higher, stoking inflation concerns. This, in turn, led to tighter global liquidity conditions and a stronger US dollar, while a falling surplus in parts of the Middle East further weighed on gold prices, according to a report by Axis Mutual Fund.

UTI Silver ETF posted the steepest decline in March, delivering a negative return of around 14.72%.

In mid-March, Fed Chair Jerome Powell signalled that the oil shock was an “energy-driven inflation tax” requiring interest rates to stay higher for longer. Signs of tightening dollar funding appeared, reinforcing the view that cash dollars were in high demand, which removed the liquidity tailwinds that had buoyed gold and instead created headwinds from a strengthened dollar and a resolutely hawkish policy outlook, the report by Axis Mutual Fund said.

The result was a crash in precious metals by mid-March. Gold dropped over 10% in a week, its steepest weekly fall since 1983, and silver plunged more than 15% in the same week. At the same time, a previously supportive trend began to reverse. After two years of accumulation, central banks slowed their gold purchases in early 2026, and gold-backed ETFs saw net outflows for several consecutive weeks.