- Silver rally has room to run in the eyes of some technical analysts
- Silver struggled with other commodities last year as the U.S. dollar strengthened
- Traders who have a strong conviction that silver prices will falter can utilize inverse silver ETF options to play the fall
The iShares Silver Trust (NYSEArca: SLV) and the ETFS Physical Silver Shares (NYSEArca: SIVR) are both up more than 10% this year. While that lacks the torrid pace set by comparable gold exchange traded funds, some of which are up more than 18% year-to-date, the silver rally has room to run in the eyes of some technical analysts.
Silver and the aforementioned exchange traded funds struggled in unison with other commodities last year as the U.S. dollar strengthened. SLV and SIVR both finished the year with double-digit losses that exceeded those of comparable gold ETFs.
Investors have previously turned to silver exchange traded funds as an asset with a safe store of value and as a metal with wide industrial application in a growing economy. However, the precious metal is now suffering from a bad turn on both fronts. That means heading into 2016 silver ETF investors face a confounding set of circumstances.
SLV “has now spent much of the past five weeks trading above its 200-day moving average. While it has not yet broken free from the average’s resistive powers, it has not enjoyed this much sunshine since mid-2014 when it was trading near $21,” reports Michael Kahn for Barron’s.
Investors have previously turned to silver exchange traded funds as an asset with a safe store of value and as a metal with wide industrial application in a growing economy. However, the precious metal is now suffering from a bad turn on both fronts.
Traders who have a strong conviction that silver prices will falter can utilize inverse silver ETF options to play the fall. More aggressive traders can take a look at the VelocityShares 3x Inverse Silver ETN (NYSEArca: DSLV), which takes the -300% performance of silver, and the ProShares UltraShort Silver (NYSEArca: ZSL), which takes the -200% performance of silver price movements.
“As with gold last month, there is a short-term resistance just overhead from the October 2015 high. However, unlike gold, this resistance is quite close to the three trendlines at $16.21. Therefore, a rally now would break four resistance features at one time for quite a convincing move. Silver traded Wednesday at $15.37, and SLV is up more than 10% for the year,” according to Barron’s.
iShares Silver Trust
