The largest exchange traded fund for silver saw the highest trading volume since September in Wednesday’s melt-down in precious metals.
The $11.7 billion iShares Silver Trust (NYSEArca: SLV) traded more than 91 million shares, versus a three-month daily average of about 20 million. [Gold, Silver ETFs Tumble on Bernanke]
The fund lost 6.4% on Wednesday as silver prices dropped below $34 an ounce at one point. [ETFs and the Gold/Silver Ratio]
Traders will be watching to see if the silver ETF can hold the 200-day simple moving average, a technical indicator.
The fund is still up 24.5% year to date including Wednesday’s pullback with silver enjoying the best performance in the commodity complex. Other silver ETFs include PowerShares DB Silver Fund (NYSEArca: DBS) and ETFS Physical Silver Shares (NYSEArca: SIVR).
Precious metal ETFs fell hard Wednesday on speculation the Federal Reserve may wait on further monetary stimulus following testimony from Fed chief Ben Bernanke.
“Precious metals had climbed high in 2012 on expectations that central banks in Europe and the U.S. would keep the global financial system cash-flush in an effort to prop up economic growth. Some investors buy gold and silver to shield against the weakness in paper currencies that can accompany loose monetary policy,” The Wall Street Journal reported. “But in testimony to Congress on Wednesday, the Federal Reserve chief didn’t indicate that fresh monetary stimulus was near.”
iShares Silver Trust
Full disclosure: Tom Lydon’s clients own SLV.