According to a Kitco News report, money managers have been scaling back on their gold positions and now, it’s silver’s turn to shine. The Commodity Futures Trading Commission (CFTC) noted that money managers have been more bullish with silver futures as of late.
Meanwhile, as the equities market begins to rally on the optimism of global economies reopening, gold has been taking a step back from the limelight. A return to risk is tamping down gains for precious metals like gold.
“We probably saw people leave gold to get into stocks,” said Phil Flynn, Senior Market Analyst with at Price Futures Group, in an interview with Kitco News.
Silver, on the other hand, has a much wider industrial use than gold, and money managers are hoping that as the economy returns to a sense of normalcy, silver will be highly sought after. The Kitco report noted that “during the week-long period to June 2 covered by the most recent CFTC data, Comex August gold rose by 0.3% to $1,734 an ounce, while July silver jumped by 3.8% to $18.26.”
“People have looked at silver’s performance recently and it looked cheap compared to gold,” Flynn said. “So the combination of the factors – the economy is doing better, which will increase industrial demand, along with the fact that people will want to exposure to [precious]metals and can do it cheaper in silver – seems to have attracted more people this week to silver.”
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).
Investors looking for a buy-the-dip opportunity in gold 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.
For more market trends, visit ETF Trends.