Silver ETFs Face Some February Tests

Silver and the related exchange traded funds, including the Aberdeen Standard Physical Silver Shares ETF (NYSEArca: SIVR), are off to solid starts this year after disappointing investors last year. Year-to-date, SIVR is higher by 2.20%.

While SIVR resides above its 50- and 200-day moving averages, silver could face some important technical tests this month. Silver prices currently reside just under $16 per ounce.

“This is an area that should begin support, so I think that we could get buyers at this point but the 20 day EMA is starting to roll over a bit. What does this mean? This means that we could very well drift a little bit lower. I think we may need to test the $50.50 level underneath to find more buyers. It’s not a huge surprise that we struggled just above the $16 level considering that it is a large, round, psychologically significant figure and an area that where we had seen a lot of action in the past,” according to ETF Daily News.

What’s Next

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.

“The 200 day EMA underneath of course will offer support, so I think there’s enough to believe that the buyers will continue to go into this market and look for value as the Federal Reserve looks to be a bit soft,” reports ETF Daily News. “With that in mind, I’m looking for value at lower levels to take advantage of just as I am and other precious metals like platinum and gold. I believe the US dollar is going to struggle going forward.”

Investors added nearly $17 million to SIVR last year.

For more information on the silver market, visit our silver category.

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.