While gold got the majority of attention during the pandemic sell-off in the month of March, it could be silver’s turn to shine moving forward. TDS Securities said via a Kitco News report that the precious metal could be headed for “explosive” gains.
“While deteriorating industrial demand has provided a strong headwind against silver prices (leading silver’s performance to lag gold’s), our firming real-time commodity demand indicator suggests it may now become a tailwind,” TDS said. “Indeed, a simple analysis extracting the (rolling) regression coefficient of silver’s returns as a function of gold’s and our commodity demand indicator suggested that silver has increasingly been driven by commodity demand.”
In the meantime, Kitco News reported that “silver inflows have occurred into exchange-traded funds, along with gold. Interest from Commodity Trading Advisers has been low, but this means potential for buying.”
“That being said, inasmuch as commodity demand continues to firm, the context of rising investment flows in precious metals, combined with rising commodity demand, creates the set-up for explosive performance — particularly considering the constrained supply-side and low speculative interest,” TDS concluded.
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 (NYSEArca: AGQ).
Golden Opportunities in ETFs
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.
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