Silver prices are not far behind gold, as both have rallied amid market uncertainty. But the metal is mostly tied to the performance of the broader economy. So it presents its own dynamic factors for investment.
Tariffs and inflation are adding a heavy dose of market uncertainty, spiking volatility in the equity markets. That, in turn, is translating into momentum for gold as a safe haven asset. While silver also retains the precious metal benefits associated with gold, it is also an industrial metal. That said, the broad economy could be capping gains for the precious metal.
“Silver is facing clear resistance around $35,” said Gary Wagner, editor of The Gold Forecast. “If it breaks out, $41 to $42 is the next logical level – but it’s still lagging gold.”
As Wagner also noted, the white metal has outperformed gold this quarter. But inflows into silver-focused ETFs have lagged. That, once again, could be due to silver anchored to the macroeconomy.
“It’s tied to the broader economy,” Wagner noted. “If tech and manufacturing slow, silver demand slows too. That’s part of what’s holding it back.”
Silver May See a Breakout
Nonetheless, silver could still experience a breakout. In the long-term horizon, silver’s electrical conductivity properties make it an ideal growth investment, as the world relies more heavily on alternative energy sources.
“There’s plenty of room to run—but it hasn’t broken out yet,” Wagner added, noting that a supply deficit could be an additional catalyst for higher silver prices.
When it comes to getting exposure, physical silver is always an option, but Sprott allows for a more versatile alternative: the Sprott Physical Silver Trust (PSLV). The fund provides exposure to silver without the logistical hassle of storing the physical metal.
PSLV invests in unencumbered and fully allocated London good delivery silver bars. Additionally, shareholders can redeem their shares for physical bullion anywhere in the world (subject to certain minimum conditions) if they want a more tangible investment experience.
In an uncertain market environment, investors may be wondering whether gold is the better option than silver. Sprott also has an option for those looking for both silver and gold exposure.
When precious metals like gold and silver move toward the upside, mining stocks can typically follow. Furthermore, mining stocks can exhibit a latency effect, allowing investors to build positions after the physical metal has already experienced price gains. That said, an option to consider is the Sprott Active Gold & Silver Miners ETF (GBUG).
Pliability in the Precious Metals Space
As GBUG’s fund name explicitly states, investors can also get gold exposure alongside silver, offering the duality of precious as well as industrial metals.
Furthermore, the fund is actively managed, meaning portfolio managers of GBUG can adjust the holdings of the fund based on current market conditions. That allows for pliability in the precious metals space. GBUG contains holdings of companies engaged in, among others, mining, developing, exploring, and financing operations in relation to gold and silver. For those looking to maximize diversification in these metals, this is an ideal fund.
For more news, information, and analysis, visit the Gold/Silver/Critical Minerals Channel.
An investor should consider the investment objectives, risks, charges, and expenses carefully before investing. To obtain a Prospectus, which contains this and other information, contact your financial professional or call 888.622.1813. Read the Prospectus carefully before investing, which can also be found by clicking one of the links below.
Past performance is no guarantee of future results. One cannot invest directly in an index.
Funds that emphasize investments in small/mid-cap companies will generally experience greater price volatility. Diversification does not eliminate the risk of investment losses. ETFs are considered to have continuous liquidity because they allow an individual to trade throughout the day. A higher portfolio turnover rate may indicate higher transaction costs and may result in higher taxes when Fund shares are held in a taxable account. These costs, which are not reflected in annual fund operating expenses, affect the Fund’s performance.
Sprott Asset Management USA, Inc. is the Investment Adviser to the ETFs. ALPS Distributors, Inc. is the Distributor for the ETFs and is a registered broker-dealer and FINRA Member. ALPS Distributors, Inc. is not affiliated with Sprott Asset Management USA, Inc. or VettaFi.
Exchange Traded Funds (ETFs): SETM, LITP, URNM, URN, COPP, COPJ, NIKL, SGDM and SGDJ
Physical Bullion Funds: PHYS, PSLV, CEF, and SPPP.
