Silver exchange traded funds were leading the charge in precious metals on Friday although the ETFs remained on track for a weekly loss.
The iShares Silver Trust (NYSEArca: SLV) was up nearly 3% in early trading Friday after falling the previous two sessions.
As investors speculate on growth in various emerging economies and the European debt crisis remains unsolved, silver prices could rebound as investors look for an alternative to gold. ETFs that hold bullion or track futures prices are one way to invest in silver.
A recent survey of Bloomberg analysts reported that the metal may average $38 an ounce this quarter, and could rise to a new record in 2012. [Silver ETFs Hit Hardest in Precious Metals Pullback]
“Prices now look relatively cheap to where they have been recently,” David Wilson, an analyst at Societe Generale SA in London, said.”The backdrop is still very supportive for gold and we think that silver will leverage off the back of that. Emerging markets are going to be important for demand for sure.”
China has proven to be the strongest driving force for the metals’ rise in demand. Industrial use of silver has skyrocketed due to the rapid growth that China is pacing. Investors are also bringing silver to the forefront, as gold currently costs 50 times more than silver. [Copper and Silver ETFs Hit by Position Limits]
In April, silver reached an all-time high of $50.35 per ounce, riding on the coattails of gold.
ETFs have also been a driving force in the rise of popularity of silver. They have made the metal easy to access for any investor, and do not require physical delivery or insurance. They include:
- iShares Silver Trust (NYSEArca: SLV)
- Sprott Physical Silver Trust (NYSEArca: PSLV)
- ETFS Physical Silver Shares (NYSEArca: SIVR)
- Powershares DB Silver Fund (NYSEArca: DBS)
Powershares DB Silver Fund
