The iShares Silver Trust (NYSEArca: SLV) and the ETFS Physical Silver Shares (NYSEArca: SIVR) are down 26% this year, performances that are far worse than the dismal 19.9% lost by the SPDR Gold Shares (NYSEArca: GLD).
To its credit, silver has been outperforming gold this month. Since the start of October, SLV and SIVR are up 6.2%, nearly 50% more than GLD has returned over the same time. Importantly, silver’s October run has put SLV and SIVR in positive technical positions. [Silver ETF Slams Gold Rivals]
SLV has notched a series of closes above a downtrend line that dates back to February. “For the first time in 2013, SLV is closing above a falling resistance line and smart money traders are positioned for a rally,” notes technical analyst Chris Kimble.
Commitment of traders data indicate professional speculators and other large-scale market participants are positioned for a silver rally. On a related, noteworthy is the fact that in a year in which two gold ETFs rank among the year’s 10 worst funds in terms of outflows, investors have poured $424 million into SLV. Even the Global X Silver Miners ETF (NYSEArca: SIL) has net inflows on the year.
Patient investors may be positioning for a sequel to silver’s go-go days seen a few years ago. Earlier this month, CPM Group, a commodities research, consulting, financial advisory, asset management, and commodities management firm, revealed a bullish long-term forecast on silver. [Silver ETFs Could Shine for Long-Term Investors]
Embattled silver could start another ascent over the next decade, “continuing a secular bull trend that began at the turn of the century,” said CPM in a report.
Trading just over $22, SLV is still more than 50% below its all-time high.
iShares Silver Trust
ETF Trends editorial team contributed to this post. Tom Lydon’s clients own shares of GLD and SLV.