Precious metal investors, particularly in silver, should be seeing less demand for safe haven assets as economies reopen and investors turn up the risk dial. However, silver has been moving higher in conjunction with equities, but can this bullishness continue?
“Silver markets broke higher during the week, clearing the $19.00 level finally,” said Christopher Lewis in a FX Empire article. “This is an area that has been extraordinarily difficult to overcome, so it is not a huge surprise that we would see a little bit of a breather being taken into the weekend.”
What happens from here is whether silver can push past that $20 ceiling.
“Everything being said, a test of the $20 level seems somewhat inevitable, but one has to be cautious about trying to get too cute with this because silver does tend to be very volatile and if you are trading the futures contract, it can be quite expensive,” Lewis added. “However, if you have the ability to trade smaller contracts, perhaps in the CFD market, then it is a little easier to hang on through all of the volatility. Regardless of what market you are trading though, selling simply is not an option as you will probably get run over. Keeping that in mind, I believe that the market is probably going to continue seeing a lot of chops, but most certainly in the upward direction.”
Getting Silver Exposure via ETFs
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).
For more market trends, visit ETF Trends.