Gold ETFs are garnering plenty of attention in the commodities space and with the performance to justify the adulation, but silver counterparts, such as the iShares Silver Trust (SLV), are still waiting on their time to shine.
Silver is believed by many investors to be inversely correlated with interest rates. Rising interest rates make bonds and other fixed-income investments more attractive so that the money will flow into higher-yielding investments, such as bonds and money market funds, and out of precious metals, which offers no yield at all during times of higher interest rates, and back into metals ETFs.
However, some commodities market observers believe the recent silver decline is poised to give way to some near-term upside.
Once the profit-taking activity in silver comes to an end, the weaker U.S. dollar could help silver gain more ground since it makes silver cheaper for buyers who have other currencies,” according to FXEmpire. “In addition, gold’s continuous presence at levels over $1700 per ounce will likely lead to an influx of new money into the whole precious metal sector and help silver show more upside.”
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.
Traders looking to amplify gains with silver can be considered geared products, such as the VelocityShares 3x Long Silver ETN Linked to the S&P GSCI Silver Index ER (NasdaqGM: USLV) and the ProShares Ultra Silver (NYSEArca: AGQ).
USLV seeks to replicate, net of expenses, three times the S&P GSCI Silver Index ER. The index comprises futures contracts on a single commodity. The fluctuations in the values of it are intended generally to correlate with changes in the price of silver in global markets.
For more alternative investing ideas, visit our Alternatives Channel.
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.