The once hot iShares Silver Trust (NYSEArca: SLV) and ETFS Physical Silver Shares (NYSEArca: SIVR) were once two of this year’s best-performing commodities exchange traded funds, but that scenario has rapidly changed. In recent weeks, silver has tumbled and a now lengthy losing streak for the white metal has made it one of this year’s worst-performing commodities.
SLV is at risk of notching an eighth straight month of outflows. Moreover, the ETF’s year-to-date gain has dwindled to the point that with just one or two more bad days for silver futures, SLV will turn negative this year.
“Precious metals continue to weaken, especially the price of silver which has declined ten consecutive days not counting today, and while consecutive days alone isn’t a reason to become bullish, a drop of roughly 8% in a relatively short period of time does suggest the metal is oversold. Conditions are ripening towards a relief bounce at the least, but we need more than a large drop and a streak to justify looking for a bounce,” reports DailyFX.
Silver could get another boost if gold prices start rebounding in earnest. Indian demand is vital for gold because the country is the second-largest buyer of the yellow metal behind China. India, one of the world’s largest gold consumers, could be set to lower its import tax on bullion, which could be major catalyst for gold prices.