ETF Chart of the Day: Silver | ETF Trends

With yesterday’s mention of gold related exchange traded funds and with the metal continuing its recent rakkt (up an additional 1.95% yesterday), we find good reason to highlight another precious metal, silver.

To a large extent the metals tend to “trend” together over time periods, both short and longer term, although no one will deny that silver often follows a much more volatile path, both on the way up, as well as on the way down. For instance, the performance gap or “spread” between gold and silver at its peak in 2011 was briefly as much as 57% (in favor of year to date performance of silver over gold as SLV was up 65% year to date at that time) in April of this year.

Contrast that statistic to yesterday’s close, where gold is now outperforming silver, up 22.64% year to date versus silver up 11.73%. Clearly, the slower, steadier returns have been delivered by gold over time while silver has demonstrated the ability to gap around quickly and abruptly, rarely consolidating for a period of months at a time.

SLV (iShares Silver Trust) is once again bumping up against its 50 day simple moving average (currently $31.79 a share), and this average has presented resistance on several occasions just in the past month or so, with the metal falling back each time.

It will be interesting to watch SLV closely in the next few sessions to see if it can finally break out and maintain any upward momentum, and based on past price action history, watching GLD (SPDR Gold), IAU (iShares Gold) and other long gold related ETFs as a proxy of some sort to where silver may go next, makes logical sense.

In the past few sessions we have also witnessed upside call buyers in SLV on strength in the metal, so apparently there are some in the options markets betting that the latest pop in silver prices will have some continuity to it.