With Wednesday’s tumble, the iShares Silver Trust is down nearly 11% in just the past month, forcing the fund to a residence more than 15% below its 200-day moving average, a level SLV has not closed above since March.
SLV, the largest silver ETF, also about 8% below its 20- and 50-day moving averages, but is just 8.4% above its 52-week low. That low could soon be tested if the charts are accurate. [More Declines Could be in Store for Silver ETFs]
Silver’s move below $20.50 an ounce is ominous in the eyes of some technical analysts. “The break of the key support at $20.50 favors a move towards the next key support at $18.23,” said Luc Luyet, a senior analyst at MIG in Switzerland, according to Bloomberg.
Silver is the second-worst performer, after corn, in the Standard & Poor’s GSCI gauge of 24 commodities. With Wednesday’s loss, SLV is down about 37% this year.
Silver outpaced gold last month and there are some commodities markets observers that are bullish on silver’s long-term outlook, which they see as buoyed by robust industrial demand. [Silver ETFs Could Rally]
Investors have stood by SLV and comparable funds even as they have not been shy about pulling cash from gold-backed ETFs. Two gold ETFs are found among the 10 worst ETFs in terms of 201 outflows but SLV has seen inflows.
The ProShares UltraShort Silver (NYSEArca: ZSL) could be the way for risk-tolerant investors to deal with and profit from silver’s declines. ZSL is up 8.3% in just the past week and is up almost 23% in the past month. Double-leveraged ZSL also resides 18% above its 200-day line.
ProShares UltraShort Silver
ETF Trends editorial team contributed to this post. Tom Lydon’s clients own shares of SLV.
The opinions and forecasts expressed herein are solely those of Tom Lydon, 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.