The iShares Silver Trust (NYSEArca: SLV) and ETFS Physical Silver Shares (NYSEArca: SIVR), which are backed by physical silver bullion, are up more than 2% over the past week, lending efficacy to the notion that silver exchange traded funds could be viable plays in September.
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.
According to the Silver Institute, the largest single component of physical silver demand is industrial applications. About 55% of all silver consumed is for industrial use, including various segments like electronics, medicine, water purification, solar cells and chemical catalysts, among others.
Looking ahead, the ongoing negative interest rate environment, with European and Japanese central banks cutting benchmark rates deeper into the red to promote growth, could push investors toward precious metals as a more stable store of wealth.