Silver ETFs: What's Next as Demand Grows but Supplies Dwindle

“One reason to believe they will continue to rally is the price ratio of gold to silver. It currently sits at more than 75-to-1. This is well above the historical average for the past 40 years of about 50-to-1, and similar spikes in the ratio have often led to buying demand in silver,” according to InvestorPlace.

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.

Additionally, 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.

“SLVP is now in an intermediate uptrend with support at $8.60 and resistance at $14. Try to buy shares under $9 with a trading target of $14 for a potential return of more than 55%. Long-term investors may want to hold SLVP for an even bigger gain if the price ratio of gold to silver moves closer to its historical average,” adds InvestorPlace.

iShares MSCI Global Silver Miners ETF