ETFs on Precious Metals in India are a big joke!

u/iconic_sentine_001 · Reddit — r/IndianStockMarket · January 26, 2026 at 09:48 · ⬆ 13 pts · 💬 11 comments | View on Reddit ↗

AI Summary

Original Reddit post

The post argues that Indian precious-metal ETFs are trading at severe discounts to their NAV due to broken market-making, making them traps for investors.

SILVERBEES — AVOID The author states SILVERBEES is trading at a 20.04% discount to its iNAV (₹292.73 vs ₹365.00) because no market maker or Authorized Participant is providing liquidity or redeeming units. Holding the ETF means accepting a paper claim worth 20% less than physical silver. The author calls this a trap.

You are essentially holding a paper version of silver that is worth 20% less than the actual physical metal just because no one is on the other side of the trade to provide liquidity.

LICMFGOLD — AVOID The author states LIC MF GOLD is trading at a ₹2,463 per unit loss relative to 24K gold, a 15.6% gap, because the ETF is not tracking its underlying metal. This tracking disaster is attributed to broken Indian market-making and absent Authorized Participants. The author treats this as a reason to avoid the ETF.

That’s a ₹2,463 per unit loss just for the privilege of holding an ETF.

HDFCSILVER — AVOID The author states HDFCSILVER is trading at a 19.5% discount to its underlying silver value. This discount is part of a broad breakdown in Indian precious-metal ETFs where market makers are not arbitraging the gap. The author views these ETFs as traps.

HDFCSILVER: Trading at a 19.5% discount.

SBISILVER — AVOID The author states SBISILVER is trading at a 17.4% discount to its underlying silver value. This discount is part of a broad breakdown in Indian precious-metal ETFs where market makers are not arbitraging the gap. The author views these ETFs as traps.

SBISILVER: Trading at a 17.4% discount.

TATSILV — AVOID The author states TATSILV is trading at a 18.9% discount to its underlying silver value. This discount is part of a broad breakdown in Indian precious-metal ETFs where market makers are not arbitraging the gap. The author views these ETFs as traps.

TATSILV: Trading at a 18.9% discount.

Score 13

Comments 11

▶ Full Post Text

ETFs in India seem to be out of touch with the metals they're supposed to track

Major Indian ETFs like Goldbees, Silverbees, GOLDBETA, etc are supposed to track prices of the metal in their finest purity.  But as of Monday, January 26, 2026, these ETFs aren't tracking the metal; they are tracking a complete breakdown of the Indian market-making system.

If you think you're "investing" in silver or gold through these tickers, look at the actual data from this morning’s terminal. These ETFs are bad in terms of tracking actual prices.

1. The "20% Vanish" (The value of ETF vs. Price Gap) Look at the current state of SILVERBEES. The iNAV (the actual value of the silver held) is ₹365 (Even if you adjust for COMEX prices and import duty, its 364.06), but the Market Price is stuck at ₹292.73.
   * That is a 20.04% difference.
   * You are essentially holding a paper version of silver that is worth 20% less than the actual physical metal just because no one is on the other side of the trade to provide liquidity.
2. It’s not just Silver; Gold is broken too Check out LIC MF GOLD. 24K Gold is at ₹16,136.12, but it’s trading on the exchange at ₹13,672.45.
   * That’s a ₹2,463 per unit loss just for the privilege of holding an ETF.
   * Tracking Error? No, this is a tracking disaster, a 15.6% gap between the metal and the ticker.
3. The "Joke" across the board It doesn't matter which AMC you pick.
   * HDFCSILVER: Trading at a 19.5% discount.
   * SBISILVER: Trading at a 17.4% discount.
   * TATSILV: Trading at a 18.9% discount.
4. **Why this is a trap: In a functional market, an "Authorized Participant" would step in, buy the cheap units, and redeem them for the actual metal (or cash) to make a profit, bringing the price back in line. In India, during this January 2026 volatility, the market makers are either broke, trapped in their own short positions, or just refusing to work.**

Yes this post can age like milk if Mrs Finance Minister cuts import duties and the prices fall but MCX prices are trading at a premium to spot whilst ETFs are at a discount to spot, yet ETFs will fall, MCX will surge.

Ideas

u/iconic_sentine_001 Reddit r/IndianStockMarket

Silver BeES trades at 20% discount to NAV

The author states SILVERBEES is trading at a 20.04% discount to its iNAV (₹292.73 vs ₹365.00) because no market maker or Authorized Participant is providing liquidity or redeeming units. Holding the ETF means accepting a paper claim worth 20% less than physical silver. The author calls this a trap.

u/iconic_sentine_001 Reddit r/IndianStockMarket

LIC MF Gold ETF trades at 15.6% discount

The author states LIC MF GOLD is trading at a ₹2,463 per unit loss relative to 24K gold, a 15.6% gap, because the ETF is not tracking its underlying metal. This tracking disaster is attributed to broken Indian market-making and absent Authorized Participants. The author treats this as a reason to avoid the ETF.

u/iconic_sentine_001 Reddit r/IndianStockMarket

HDFC Silver ETF trades at 19.5% discount

The author states HDFCSILVER is trading at a 19.5% discount to its underlying silver value. This discount is part of a broad breakdown in Indian precious-metal ETFs where market makers are not arbitraging the gap. The author views these ETFs as traps.

u/iconic_sentine_001 Reddit r/IndianStockMarket

SBI Silver ETF trades at 17.4% discount

The author states SBISILVER is trading at a 17.4% discount to its underlying silver value. This discount is part of a broad breakdown in Indian precious-metal ETFs where market makers are not arbitraging the gap. The author views these ETFs as traps.

u/iconic_sentine_001 Reddit r/IndianStockMarket

Tata Silver ETF trades at 18.9% discount

The author states TATSILV is trading at a 18.9% discount to its underlying silver value. This discount is part of a broad breakdown in Indian precious-metal ETFs where market makers are not arbitraging the gap. The author views these ETFs as traps.

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This Reddit post, published January 26, 2026, features u/iconic_sentine_001 discussing SILVERBEES, LICMFGOLD, HDFCSILVER, SBISILVER, TATSILV. 5 trade ideas extracted by AI with direction and confidence scoring.

Speakers: u/iconic_sentine_001 · Tickers: SILVERBEES, LICMFGOLD, HDFCSILVER, SBISILVER, TATSILV