The iShares Silver Trust (SLV) and the Aberdeen Standard Physical Silver Shares ETF (SIVR), two of the largest ETFs backed by holdings of physical silver, are in rally mode. Month-to-date gains of almost 8% have pushed the year-to-date tallies for the silver ETFs to nearly 14% and some market observers believe there’s more upside coming for the white metal.
Looking ahead, silver and the broader commodities market could find upward pressure as the Federal Reserve plans to cut interest rates, perhaps two more times, later this year.
Promising Prices For Silver
Legendary commodities trader Jim Rogers, chairman of Rogers Holdings, also sees opportunity in silver as the precious metal is better priced than gold, but levels are not yet sufficiently low enough.
“Of course, silver had a lot of making up to do. Not too long ago the gold-to-silver ratio was at all-time highs. With silver having run up 17% since then we may no longer be in that position, but there is still a long way to go before there’s any danger of silver becoming over-valued compared to gold,” according to ETF Daily News.
Silver ETFs are pushing to the upside amid increased expectations of a U.S. rate cut, even as some investors locked in profits from the white metal’s recent rally. 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.
“There is still time to get in on this silver market,” reports ETF Daily News. “If you want, wait for a pullback, then buy ‘some’ but not ‘all’ of what you’d want to have invested.”
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.
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