Buoyed by gold’s recent ascent, the iShares Silver Trust (NYSEArca: SLV) and ETFS Physical Silver Shares (NYSEArca: SIVR), which are backed by physical silver bullion, are each up more than 4% over the past month and some market observers are betting on more upside for the white metal.
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.
“On its long-term 10-year chart silver superficially looks like it may still be in a bear market, but on more careful inspection we can see that a large Head-and-Shoulders bottom pattern is completing, which is tilted compared to the similar pattern that is completing in gold, because silver tends to underperform gold at the end of bear markets and the beginning of bull markets,” according to ETF Daily News.
Moreover, unlike gold, silver sees much higher industrial demand. The precious metal enjoys heavy industrial demand that benefits from an expanding global economy. On a technical basis, silver looks appealing, as well.
“On silver’s 6-month chart we can see that it is at a good point to react back on a near-term dollar bounce, because it has arrived at the top of the channel shown in an overbought state, and any such reaction will be regarded as throwing up a buying opportunity, especially if it should break down from the channel and drop back towards its July lows, although it is considered unlikely that it will drop back this far,” reports ETF Daily News.
Other silver ETFs include the PowerShares DB Silver Fund (NYSEARCA: DBS), which is up 4.4% over the past month. The ETRACS CMCI Silver Total Return ETN (NYSEARCA: USV) is higher by 3.6% over that period.
Investors can tap silver equities with the Global X Silvers Miners ETF (NYSEArca: SIL) and related ETFs. SIL, the largest silver miner-related ETF, tries to mirror the Solactive Global Silver Miners Total Return Index, which is also comprised of global silver miners.
For more information on the silver market, visit our silver category.
The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.