Silver and silver miner exchange traded funds are off to a fast start this month after a huge July. They’re being bid higher in part by worries over the global recovery and governments saddled with large debt burdens.
The $12.5 billion iShares Silver Trust (NYSEArca: SLV) gained about 4% on Tuesday, as precious metals regained their luster on concerns over Italian and Spanish bonds. Silver ETFs, which also include PowerShares DB Silver (NYSEArca: DBS) and ETFS Physical Silver Shares (NYSEArca: SIVR), are the best-performing ETFs over the past month.
Silver futures were trading over $41 an ounce Wednesday morning.
The silver ETFs have more than doubled over the past year but remain below the record high set before the market corrected hard in May following higher futures margin requirements. [Gold, Silver ETFs Higher As Situation Worsens in Italy.]
A weaker U.S. dollar, a global debt crisis and lower-than-expected economic growth have all contributed to the investor demand of “poor man’s gold,” reports Trang Ho for The Wall Street Journal.
“Financial assets are generally out of favor due to the European debt drama and the debt ceiling impasse in Washington,” Tom Winmill of Midas Fund told WSJ. [Gold, Silver ETFs Pare Gains After Debt Agreement.]
Furthermore, the $474 million fund Global X Silver Miners (NYSEArca: SIL) is up more than 20% over the past month along with the silver ETFs. It invests in miner stocks.
It’s not just hedge funds buying and trading silver ETFs. Analysts are finding that individual investors are buying ETF shares in small lots. Murray Coleman for Barron’s reports that the number of brokerage accounts with 1,000 shares or less doubled for SLV over the past 12 months.
ETFS Physical Silver Shares
Global X Silver Miners
Tisha Guerrero contributed to this article.
Full disclosure: Tom Lydon’s clients own SLV.