US Policy Changes and Budget Expectations Shake Indian Markets; Gold and Silver Prices May See Correction
Changes in US trade policies are having a direct impact on Indian markets. The imposition of US tariffs on South Korea and ongoing uncertainty over the India–US trade agreement have increased pressure on domestic equities.
At the same time, gold and silver prices have been rising sharply. While this has benefited investors so far, experts now caution that precious metals may face a notable correction if the stock market witnesses a sharp decline.
The Indian stock market is currently experiencing high volatility. Geopolitical tensions and continuous selling by foreign institutional investors (FIIs) are major factors behind the weakness. Market experts also warn that if the upcoming Union Budget 2026 fails to meet expectations, benchmark indices could decline further.
Historically, gold is considered a safe-haven asset when equity markets underperform. However, recent trends show an unusual divergence. Over the past year, the Nifty 50 has delivered only about 8 percent returns, while silver prices have surged nearly 250 percent. Gold prices, meanwhile, have climbed close to 94 percent, surprising many retail investors.
Experts say that if equity markets crash sharply, the impact will not be limited to stocks alone. Other asset classes such as gold and silver could also witness a decline. According to V.K. Vijayakumar, Chief Investment Strategist at Geojit Investments, investors may start selling gold and silver ETFs to raise cash and take advantage of lower stock prices. This profit-booking could trigger a significant correction in precious metals.
Kotak Securities, in its analysis, stated that silver prices could temporarily fall by 25 to 30 percent during a major market crash, as investors liquidate positions to cover losses elsewhere. However, analysts believe such a decline would be short-lived, and global demand could continue to support gold prices over the long term.
Overall, Indian markets are at a critical juncture. The direction of the market in the coming days will largely depend on Union Budget announcements and developments in US trade policy. Market participants advise investors to remain cautious and avoid making heavy investments in gold and silver solely based on past returns.
Disclaimer: This article is for informational purposes only. The views and recommendations expressed are those of individual analysts or brokerage firms. News18 Tamil Nadu is not responsible for these views. Investors are advised to consult financial experts before making any investment decisions.
