Precious metals are driving their way higher on Wednesday.
Gold prices are gaining once again, headed for potentially all-time new highs, and have already hit another nine-year high of $1,829.80 in September futures, as the metal marches toward levels not seen since 2012.
Gold ETFs are benefitting as well, with the SPDR Gold Shares (NYSEArca: GLD) and the SPDR Gold MiniShares Trust (NYSEArca: GLDM) among the bullion-backed ETFs that added new assets at a rapid pace in the first six months of 2020.
“Gold-backed ETFs (gold ETFs) recorded their seventh consecutive month of positive flows, adding 104 tonnes (t) in June – equivalent to US$5.6bn or 2.7% of assets under management (AUM) – taking global holdings to new all-time highs of 3,621t,” said the World Gold Council (WGC) iin a note out Tuesday.
Silver is also making impressive moves on Wednesday, climbing over 2.2% to above $19, and having closed at almost a 4-year high. The industrial metal appears ready to break out and test the $20 level in September futures, carrying silver ETFs higher along with it.
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).
“Silver is still near all-time lows in many ways,” wrote Hubert Moolman in a Kitco News article. “One of the most significant measures wherein silver is at an all-time low is its price relative to the amount of US dollars (US monetary base) in existence.”
“There are way more US dollars in existence today than at any point in history, but yet the silver price is not reflecting that reality,” Moolman wrote. “Another measure wherein silver is at an all-time low is of course debt, and this I explained here. The point is that silver is still really cheap. It can only be expensive if it comes into its own as a monetary asset. No industrial demand or other demand as a commodity (especially given the outlook of the world economy) will cause silver to be expensive or in a bubble.
Finally, platinum is testing major resistance, trading near $860 an ounce, and could be ready to break out along with its precious metals brethren.
Ike Roberts said, “Platinum is a great way to bet on the car industry rebound without having any auto company specific default risk. In 2008 the price of platinum crashed with the banking crises and then soared the following year to over $1,600 an ounce. We foresee a similar set of circumstances during the present crisis.”
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.
For more market trends, visit ETF Trends.