Precious metals are no doubt shining amid the Covid-19 pandemic as the safe haven of choice at the moment, but it’s not just gold in the spotlight. Silver is also gaining and could be poised for even greater gains.
“Silver is set to outshine gold, even as prices of both precious metals soar in the midst of a faltering global economy and a weakening U.S. dollar,” a CNBC report noted. “This year, gold prices have shot to record highs not seen since September 2011. Investors have been fleeing to ‘safe haven’ assets as the pandemic shows no signs of abating. Gold prices hit a new record close of $2,021 per ounce overnight — settling above $2,000 for the first time. It was last trading at $2,020.30. Geopolitical unrest overnight likely added to the spike.”
“Silver … has a much higher industrial component to it. So, a much higher component of silver supply-demand in industrial consumption. And in an environment where we see the global economy recovering, that’s another reason to buy silver,” said Michael Hsueh, a commodities and foreign exchange strategist at Deutsche Bank.
ETF Opportunities in Gold and Silver
Investors looking for core exposure to gold in 2020 can look at the SPDR Gold Shares (GLD). GLD seeks to reflect the performance of the price of gold bullion, less the expenses of the Trust’s operations–the Trust holds gold bars and from time to time, issues baskets in exchange for deposits of gold and distributes gold in connection with redemptions of baskets.
Traders looking to use leverage can look at the Direxion Daily Gold Miners Bull 3X ETF (NYSEArca: NUGT), which makes an indirect play on the precious metal via gold miners. NUGT seeks daily investment results, before fees and expenses, of either 300% or 300% of the inverse (or opposite), of the performance of the NYSE Arca Gold Miners Index.
ETF investors looking to get in on the silver action can look to funds like 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. For those looking for leverage, they can look to ETFs like the VelocityShares 3x Long Silver ETN Linked to the S&P GSCI Silver Index ER (NasdaqGM: USLV) and the ProShares Ultra Silver ETF (NYSEArca: AGQ).
“During bull markets for both metals, fleet-footed silver often ascends faster than its heavier, more expensive cousin,” said Ned Naylor-Leyland, precious metals fund manager at Jupiter Asset Management
“There is plenty of upside for both gold and silver, in our view and … for silver to continue to outshine even gold,” Naylor-Leyland added.
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