Unlike gold, silver can be an intriguing metals exposure option given that it can serve as an industrial or a precious metal. Some analysts are seeing upside for 2023, which should reverse the course that silver has been traveling for most of 2022.
“Silver is probably the most promising commodity for this decade,” an Investing Haven article noted. “We write a lot about silver both in the public domain (silver tag) but also in our premium services. Silver has a track record of running very hard and fast, in both directions. There is a very good reason why silver is called the restless metal.”
To add to this, dollar movements can also sway how metals (particularly precious metals) react. For most of 2022, a stronger greenback has been applying downward pressure to precious metals like gold and silver, but the dollar has been waning as of late.
The anticipation that the U.S. Federal Reserve may ease off the accelerator pedal when it comes to rising interest rates could be feeding into stronger metal prices. Additionally, more discussion surrounding a potential recession should also feed into a safe haven flight towards risk-off assets like precious metals.
Leverage Diversified Metal Exposure
When the macroeconomic backdrop favors metals, precious or industrial, traders can play the moves using the Direxion Daily Metal Miners Bull 2X Shares (MNM). As opposed to getting direct metals exposure, MNM focuses on miners, which can also move in tandem when metal prices start to experience upside.
Traders looking to play moves with added leverage to match their conviction can look to leveraged exchange traded funds (ETFs) from Direxion such as MNM. Like all leveraged Direxion ETF products, the fund provides tactical exposure to a long bias in metal mining in the convenience of an ETF wrapper.
Given this, the fund seeks daily investment results equal to 200% of the performance of the S&P Metals and Mining Select Industry Index. The index is a modified equal-weighted index that is designed to measure the performance of the equity securities of companies in the S&P Total Market Index that are classified by the GICS as being in the metals and mining industry.
The metals and mining industry includes companies in the following sub-industries: aluminum, coal and consumable fuels, copper, diversified metals and mining, gold, precious metals and minerals, silver, and steel. The index does not include metal commodities, so long-term investors looking to diversify their portfolios with commodities should look at other options.
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