The iShares Silver Trust (NYSEArca: SLV) and ETFS Physical Silver Shares (NYSEArca: SIVR), which are backed by physical silver bullion, are trading mostly flat over the past month, but investors are not sticking around to see what silver’s next big move will be.
“Investors pulled $362 million from iShares Silver Trust this year, setting it on course for the biggest redemption in six years,” reports Bloomberg. “The exit has shrank holdings in the world’s largest ETF backed by the metal to the least since March 2016. IShares owns about half of the total silver holdings in all silver-backed ETFs tracked by Bloomberg.”
Silver could get another boost if gold prices start rebounding in earnest. Indian demand is vital for gold because the country is the second-largest buyer of the yellow metal behind China. India, one of the world’s largest gold consumers, could be set to lower its import tax on bullion, which could be major catalyst for gold prices.
According to the Silver Institute, the largest single component of physical silver demand is industrial applications. About 55% of all silver consumed is for industrial use, including various segments like electronics, medicine, water purification, solar cells and chemical catalysts, among others.
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