The iShares Silver Trust (NYSEArca: SLV) and the ETFS Physical Silver Shares (NYSEArca: SIVR), two of the largest physically-backed silver exchange traded funds, have been trailing comparable gold rivals for much of this year, but the white metal is showing plenty of signs of breaking that trend.
SLV and SIVR posted decent gains on Wednesday, extending a run that has seen the ETFs hit multi-month highs on consecutive days. The two silver ETFs are each up more than 17% year-to-date. Unlike gold, silver is used in many industrial applications, but industrial demand is diminishing as global growth, notably China, begins to slow. Industrial demand for silver dipped 0.5% last year on lower demand from Europe and North America.
“Silver rallied 7.8 percent in the past four sessions, more than twice the pace of gold’s increase, helped by signs of improving industrial demand and mounting speculation that the Federal Reserve will be slow to boost interest rates. Lower rates are a boon to precious metals because they don’t offer yields or dividends,” reports Luzi-Ann Javier for Bloomberg.
[related_stories]Data indicate silver’s myriad industrial applications are helping the metal’s recently positive price action.
“Demand for American Silver Eagles remains strong after setting a sales record in 2015. The US Mint sold more than 4.1 million Silver Eagles last month, compared with 3.5 million in March 2015. Meanwhile, February silver sales at Perth Mint jumped 167.54% from the same period a year ago. It was the sixth straight month of silver sales over 1 million ounces for the Australian mint,” according to a Seeking Alpha analysis of silver.
“U.S. manufacturing expanded in March for the first time in seven months, fueled by a surge in orders, a private report showed April 1. Silver is used in industrial products ranging from electronics to solar panels,” according to Bloomberg.
On the supply side, silver miners are finding less deposits and producers are expanding into new projects, which suggests that silver could be in shorter supply ahead.
iShares Silver Trust
