New Delhi, Feb. 4 -- After a blistering rally over the past year, gold and silver prices are beginning to see sharp corrections. Gold ETFs have fallen over 12% since 29 January, and silver ETFs have slumped over 24% as of 4 February. Experts attribute the correction to profit-booking and expectations of a stronger dollar following the nomination of hawkish Kevin Warsh as the next US Federal Reserve chair.

Over last one-year period, gold ETFs have delivered over 80% returns (as of 4 February), while silver ETFs have delivered over 176% returns. After the recent volatility in gold and silver prices, experts now advise caution.

However, investors who are yet to build exposure to precious metals-especially gold, which acts as a hedge for in...