Industrial Demand and Syria Crisis Help Silver ETFs Shine
September 3rd 2013 at 4:35pm by Tom Lydon
Silver exchange traded funds were the best performing exchange traded funds in August, bolstered by bargain hunting speculators and escalating geopolitical tensions surrounding Syria.
Silver ETFs are off to a fast start in September with a nearly 4% rally on Tuesday. [How ETFs are Helping Silver Outperform Gold]
Speculators jumped into previously downtrodden silver ETFs as data pointing to an improving U.S. economy, along with potentially greater industrial demand for silver, and Middle East tensions pushed many into safe-haven assets, writes Eric Dutram for Zacks.
Over the past month, silver ETFs have attracted over $100 million in inflows.
The silver rally may still have some legs if global manufacturing activity picks up and if broad industrial demand increases. Jewelry and ETFs account for a substantial portion of global silver demand every year, but by some estimates, industrial use is 50% of annual silver demand. [Silver ETFs Getting Help From Speculators]
Investors are also looking at silver as a safe-haven bet in light of a possible military response to Syria’s alleged chemical weapons use. [Silver ETF’s 20% August Rally Beats Gold]
The iShares Silver Trust (NYSEArca: SLV) tracks silver price movements. The fund is backed by 340,820,040.1 ounces of silver stored in London and New York vaults. Each share of SLV is equivalent to holding 0.965 ounces of silver. SLV has a 0.50% expense ratio. The ETF is up 20.2% over the past month.
The ETFS Physical Silver Shares (NYSEArca: SIVR) also tracks silver prices through physical silver holdings. The fund is backed by 17,977,105 ounces of silver stored in London vaults. Each share of SIVR is equivalent to 0.988 ounces of silver. SIVR has a 0.30% expense ratio. The ETF is up 20.1% over the last month.
For more information on silver, visit our silver category.
Max Chen contributed to this article.
The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.