The iShares Silver Trust (NYSEArca:SLV) and ETFS Physical Silver Shares (NYSEArca:SIVR) are each up about 4% year-to-date. Some commodities market observers see silver as attractively valued right now, a scenario that could set the stage for the white metal to rally in the second half of the year.
Some commodities market observers see more upside coming for silver and the aforementioned exchange traded funds. It could just be a matter of investors properly timing new entries into the likes of SIVR and SLV. Expect gold prices to continue affecting silver and the related ETFs.
“A higher price will not bring gold into circulation. Gold did not circulate when its price was $250 in 1999, nor when it hit almost $2,000 in 2011. It will still not circulate if the price hits $15,000 in the future. High or rising prices will not do the trick. In the classical gold standard, it was not high price that did it,” according to ETF Daily News.
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.
Silver’s current discount to gold is seen as attractive and could be a sign of more upside coming for the white metal.
“The last time silver had such a large discount was the first week of May. After that, the price rose more than $1.25,” reports ETF Daily News.
Looking ahead, the ongoing negative interest rate environment, with European and Japanese central banks cutting benchmark rates deeper into the red to promote growth, could push investors toward precious metals as a more stable store of wealth.
Moreover, unlike gold, silver sees much higher industrial demand. The precious metal enjoys heavy industrial demand that benefits from an expanding global economy.
For more information on the silver market, visit our silver category.