Silver ETFs Primed to Rally into Year-End | ETF Trends

The iShares Silver Trust (SLV)  and the Aberdeen Standard Physical Silver Shares ETF (SIVR) could deliver for investors as the end of year draws closer.

Silver prices and related ETFs have surged on improving fundamentals with demand-side support due to the coronavirus uncertainty, stimulus measures, and recovering industrial sector. On the other side, supplies are dwindling as well.

SIVR seeks to replicate, net of expenses, the price of silver bullion. The shares are backed by physically allocated silver bullion held by the custodian. All physical silver held conforms to the London Bullion Market Association’s rules for good delivery.

“A higher gold price, along with the ongoing recovery in industrial demand, particularly from China, means that the price of silver is likely to rise in the year ahead,” according to Capital Economics.

Silver Needs to Regain Its Sizzle

Silver ETFs had a rough go of things in September, but that could also mean buying opportunities are near with SIVR and SLV.

“Silver saw a significant decline in September, falling from a peak of $29 an ounce down to below $23,” reports Kitco. “The precious metal is feeling the downward pressure from the somewhat firmer U.S. dollar and an uptick in U.S. real yields — the same drivers weighing on gold at the moment, wrote Capital Economics assistant commodities economist Samuel Burman.”

SLV seeks to reflect generally the performance of the price of silver. The Trust seeks to reflect such performance before payment of the Trust’s expenses and liabilities. It is not actively managed. The Trust does not engage in any activities designed to obtain a profit from, or to ameliorate losses caused by, changes in the price of silver.

Precious metals like silver have had a strong rally higher for much of 2020, September not with standing. However, a number of analysts still believe precious metals like silver have more room to run.

“All in all, a market deficit in conjunction with a higher gold price should lift the price of silver to $25 and $27 per ounce by end-2020 and end-2021, respectively,” according to Capital Economics. “Demand for non-interest bearing safe-haven assets, such as gold and silver, should rise as real yields in the U.S. drift a little lower. We forecast that the US ten-year nominal yield will fall to 0.50%, from 0.70% currently, by the end of this year and that it will remain at this level in 2021. The Fed has already stated that it will keep policy ultra-loose until at least 2023 and allow inflation to overshoot its target.”

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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.