New Delhi, Aug. 31 -- Gold and silver exchange-traded funds (ETFs) came under sharp selling pressure on August 31, falling by as much as 4% as weakness in precious-metal prices spilled over into domestic markets. Hawkish comments from US Federal Reserve Chair Kevin Warsh strengthened expectations of an interest-rate hike, pushing bond yields higher and reducing the appeal of non-yielding assets such as gold and silver.

The decline came amid a combination of aggressive profit-taking, weak global cues, rising US bond yields and escalating tensions between the US and Iran, which have pushed energy prices higher and raised concerns about a fresh inflation flare-up.

Silver ETFs saw the steepest decline in morning trade. SBI Silver ETF fell 4...