Precious metals like silver have had a strong rally higher, but is the correction finally upon us? A number of analysts still believe precious metals like silver have more room to run, which could mean Tuesday’s trading session was a minor speed bump—or was it?
Per a CNBC report, Tuesday saw “silver plunging as much as 13.8% – its biggest daily decline since October 2008. It was down 13.4% to $25.24 per ounce. Platinum dropped 4.7% to $940.08, and palladium slid 4.7% to $2,116.33.”
“This feels like a mini-crash. We could not overcome the early morning headlines of a Russian potential vaccine, and there was just continued optimism flowing into stocks,” said Edward Moya, senior market analyst at broker OANDA.
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:
- SLV seeks to reflect generally the performance of the price of silver. The Trust seeks to reflect such performance before payment of the Trust’s expenses and liabilities. It is not actively managed. The Trust does not engage in any activities designed to obtain a profit from, or to ameliorate losses caused by, changes in the price of silver.
- SIVR seeks to replicate, net of expenses, the price of silver bullion. The shares are backed by physically allocated silver bullion held by the custodian. All physical silver held conforms to the London Bullion Market Association’s rules for good delivery.
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).
Another fund to consider as a backdoor play on silver is via miners in the ETFMG Prime Junior Silver Miners ETF (SILJ), which recently surpassed the $300 million in assets. The fund seeks investment results that correspond generally to the price and yield performance of the Prime Junior Silver Miners & Explorers Index.
Heavy Metals in ETFs
Aside from silver, investors looking to get gold exposure can look at funds like SPDR Gold Shares (NYSEArca: GLD) and the SPDR Gold MiniShares (NYSEArca: GLDM). Precious metals like gold offer investors an alternative to diversify their holdings, and like other commodities, gold will march to the beat of its own drum compared to the broader market.
As opposed to actually purchasing physical platinum, investors can take advantage of platinum through exchange-traded funds (ETFs) like the Aberdeen Standard Platinum Shares ETF (NYSEArca: PPLT). PPLT seeks to reflect the performance of the price of physical platinum, less the expenses of the Trust’s operations and is designed for investors who want a cost-effective and convenient way to invest in platinum with minimal credit risk.
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