As stock market investors get a reprieve from the tariff volatility, silver prices have been showing signs of outpacing gold. If this is the start of an early trend, investors will want to consider exposure to the white metal.
Gold has been the default play amid the market uncertainty, providing an ideal safe haven from not only tariffs, but also geopolitical tensions and inflation. However, silver can also benefit as a precious metal in addition to being an industrial metal that’s tied to the broader economy.
Multiple Records
“The story in the commodity space this year has been around gold, whose price has set multiple records on inflation fears, exacerbated by the aggressive tariff policies implemented by US President Donald Trump,” Mining.com explained. It noted that “silver, which is often tied to gold but has more industrial uses.”
Silver’s industrial usage is vital, as nations become more wary of their carbon emissions. Alternative energy technologies such as solar panels and lithium batteries in electric vehicles (EVs) make use of silver for its high conductivity properties.
That conductivity also extends to silver’s use in data centers. Artificial intelligence (AI) and machine learning applications require high electricity usage. That makes the white metal an important component in information technology (IT) operations.
A short-term market recovery in addition to the aforementioned growth opportunities make silver an intriguing prospect for addition to a portfolio.
A Bullion & Mining Option for Silver
Investors looking to add exposure to the white metal have a pair of options from Sprott worth consideration. One provides direct exposure to silver bullion while the other offers an indirect play with miners.
For direct exposure, consider the Sprott Physical Silver Trust (PSLV). The fund provides exposure to silver without the logistical hassle of storing the physical metal. The fund invests in unencumbered and fully allocated London good delivery silver bars. For added flexibility, shareholders can redeem their shares for physical bullion anywhere in the world (subject to certain minimum conditions) if they want a more tangible investment experience.
Mitigating Overconcentration
When silver demand increases, so does the need for ancillary services to the industry such as mining. As such, consider silver mining exposure with the Sprott Silver Miners & Physical Silver ETF (SLVR). The fund tracks the performance of the Nasdaq Sprott Silver Miner Index. This index mimics the performance of the industry. That includes producers, developers, and explorers, as well as silver itself. Having a selection of holdings in the convenience of an ETF wrapper mitigates overconcentration risk of one or a few silver mining stocks.
For more news, information, and analysis, visit the Gold/Silver/Critical Minerals Channel.
An investor should consider the investment objectives, risks, charges, and expenses carefully before investing. To obtain a Prospectus, which contains this and other information, contact your financial professional or call 888.622.1813. Read the Prospectus carefully before investing, which can also be found by clicking one of the links below.
Past performance is no guarantee of future results. One cannot invest directly in an index.
Funds that emphasize investments in small/mid-cap companies will generally experience greater price volatility. Diversification does not eliminate the risk of investment losses. ETFs are considered to have continuous liquidity because they allow an individual to trade throughout the day. A higher portfolio turnover rate may indicate higher transaction costs and may result in higher taxes when Fund shares are held in a taxable account. These costs, which are not reflected in annual fund operating expenses, affect the Fund’s performance.
Sprott Asset Management USA, Inc. is the Investment Adviser to the ETFs. ALPS Distributors, Inc. is the Distributor for the ETFs and is a registered broker-dealer and FINRA Member. ALPS Distributors, Inc. is not affiliated with Sprott Asset Management USA, Inc. or VettaFi.
Exchange Traded Funds (ETFs): GBUG, SLVR, SETM, LITP, URNM, URNJ, COPP, COPJ, NIKL, SGDM and SGDJ
Physical Bullion Funds: PHYS, PSLV, CEF, and SPPP
