Silver Bulls Are Now Out in Full Force | ETF Trends

It’s a good time to be a precious metal investor, and not just in gold. Silver, with its wider industrial use, is also gaining steam and as such, the bulls are out in full force.

Silver futures are chugging alongside gold’s serendipitous run higher amid the uncertainty of the coronavirus pandemic. With equities still a wild card heading through to the end of 2020, precious metals like silver are benefitting.

What’s causing the rally? A confluence of low interest rates is feeding into a weaker dollar and that’s only exacerbated by fears of inflation and prospects of slower growth.

“I think it’s all of the above plus an additional one,” Reggie Browne, principal at GTS, told CNBC’s “ETF Edge.

“With the central banks around the world, with quantitative easing and printing of new currency to support some of the coronavirus rescue measures, I think we’re seeing weak currencies across the board,” Browne said. “I think the biggest story here [is]I think you’re seeing greater adoption of commodities and particularly gold and silver being put into asset allocation models, and I think that’s a new trend that we’re seeing that’s driving up the price of gold.”

^BAGS Chart

^BAGS data by YCharts

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 physical 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.

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