The iShares Silver Trust (NYSEArca: SLV) and ETFS Physical Silver Shares (NYSEArca: SIVR) surged earlier this year, but over the past quarter, the dominant silver exchange traded funds have each tumbled more than 14%.
Silver ETFs have recently been sliding as some market participants started pricing in a rate hike from the Federal Reserve later this year and its potential impact on precious metals.
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 one or two hikes this year from a previously expected four rate hikes.
SEE MORE: Analysis – Silver ETFs Are Outshining Gold
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.
While it seems unlikely that the Fed will raise interest rates this month, any speculation regarding increased likelihood of rate hike later this year could pressure silver and other commodities in the near-term.
[related_stories]Additionally, there are some overlooked catalysts that could buoy the white metal.
“Silver and gold prices erratically increase along with debt. Given that silver prices are near the low end of their 20 year ‘megaphone’ pattern, expect much higher silver prices. Further, the cost of production is increasing rapidly and the ore quality is declining. Expect prices to increase based on limited supply,” according to ETF Daily News.
SEE MORE: 11 Silver ETFs Outshining the Competition
Looking ahead, the quickly expanding photovoltaic panel or solar industry could continue to drive silver demand. Installations and investment in solar panels, which incorporate silver for its electrical conductivity, are at record levels, reports Henry Sanderson for the Financial Times.
“Given the precariousness of the central bankers’ fiat currency Ponzi Schemes and the coming realizations about the intrinsic value of paper investments and debt instruments, silver and gold prices should move much higher in the next five years due to heavy demand,” adds ETF Daily News.
For more information on the silver market, visit our silver category.
iShares Silver Trust
