Silver exchange traded funds are making a strong move to the upside in early 2012, reversing some of the damage inflicted by multiple sell-offs in the wake of the metal’s spike to about $50 an ounce.

The iShares MSCI Silver (NYSEArca: SLV), PowerShares DB Silver Fund (NYSEArca: DBS) and ETFS Physical Silver Shares (NYSEArca: SIVR) gained about 3% on Friday to climb above the 50-day moving average and falling trendline resistance. [What’s in Store for Silver ETFs?]

Earlier this week, Sprott Physical Silver Trust (NYSEArca: PSLV) announced a follow-on offering of about $300 million, the proceeds of which will be used to purchase silver. [Physical Silver ETF Falls 9% After Follow-On Offering]

Silver ETFs ended 2011 with losses but are off to a big start this year, gaining more than 10% so far. They have also been outperforming gold prices in 2012, a bullish signal for precious metal ETFs. [Gold ETFs Size Up 200-Day Average as Dollar Weakens]

Silver tends to be more volatile than gold and is also more closely linked to the global economy due to silver’s wider industrial applications.

ETFS Physical Silver Shares

Full disclosure: Tom Lydon’s clients own SLV. John Spence owns ZSL.

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.