The iShares Silver Trust (NYSEArca: SLV) and ETFS Physical Silver Shares (NYSEArca: SIVR), two of 2016’s best-performing commodities exchange traded products for much of the year, are, like other precious metals plays, coming off a rough August.
Due to the fact that seasonal trends are often more impactful with commodities than other asset classes, investors may want to tread carefully with silver ETFs this month because September is historically unkind to the white metal.
Silver and other precious metals enjoyed safe-haven demand as the equities market plunged into a correction. The metal also maintained its momentum as the Federal Reserve lowered its interest rate outlook to only two hikes this year from a previously expected four rate hikes.
Additionally, with the dovish Fed stance, the U.S. dollar weakened, which made USD-denominated silver cheaper for foreign buyers and a better store of value for U.S. investors.[related_stories]
SLV “tends to fall in September. It only moves higher in September about 40% of the time, and tends to drop by 2.5% on average. This year could be worse as the Silver Trust is currently in a correction following a massive eight-month surge,” according to Investopedia.