Trading in silver-themed exchange traded funds (ETFs) ruled the action Monday in a volatile session that saw the metal’s price back away from a run at $50 an ounce.
The iShares Silver Trust (NYSEArca: SLV) was flat for the session heading into the closing bell after an up-and-down day. Over 175 million shares of the silver ETF had traded at last check, a new record. For comparison, the SPDR S&P 500 ETF (NSYEArca: SPY), usually the most active ETF by volume, traded about 53 million shares.
Trading volume also surged in ProShares UltraShort Silver (NYSEArca: ZSL), a leveraged ETF designed to profit when silver prices fall. [Trading Volume Explodes in ProShares UltraShort Silver.]
Precious metals could see more volatility this week as the Federal Reserve meets Tuesday and Wednesday, followed by a press conference with Fed Chairman Ben Bernanke.
“Silver is flying a little too close to the sun as $50 feels pretty radioactive,” a precious metals trader told FastMarkets. “The fact that we got so close [to that level]might have spooked some investors and could be the trigger for a 10% to 15% near-term pullback.”
Full disclosure: Tom Lydon’s clients own SLV.
The opinions and forecasts expressed herein are solely those of John Spence, 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.