Silver had another outstanding day of performance on Thursday, rallying above $29 an ounce, and reaching territory not seen since 2012 for the industrial metal. Silver ETFs are recipients of the explosive uptrend as well, which is sure to be making silver bulls elated.
Silver is outperforming gold recently with September Comex silver futures climbing over 5% again, to reach $29.20 an ounce level on Thursday amid low interest rates and ongoing concerns about the coronavirus and foreign relations with China.
“Gold-Silver ratio is at 73.9 — new low, but bullish,” says RBC Wealth Management.
Precious metals are on a tear. The rally is projected to continue with silver reaching $30 an ounce and gold $2,100 by year-end, a number that is now within spitting distance for the lustrous metal. Experts say that investors should prepare for higher volatility at these price levels, levels that haven’t been tested in years.
“Expect more volatility. Tomorrow’s jobs numbers, many new weak holders and Central Bank trades could have short term up and down [moves],” RBC Wealth Management managing director George Gero notes. “Path of least resistance for gold and silver is up as only 88 days left for U.S. elections.”
Silver has been popular in 2020. July was a particularly epic month for the industrial metal, as it witnessed silver rallying an impressive 34%, beating every major global financial asset. Now analysts see a bright future for the metal.
“The all-time high for silver in the coming years is not out of reach, and maybe much sooner than anybody thinks,” said Jim Wykoff of Kitco.
Silver futures’ all-time settlement high was at $48.599 in April 2011, according to FactSet data. Analysts prefer the metal for its unique combination of industrial and precious metal attributes.
“On the industrial side, silver continues to outperform and remains our precious metal of choice as both precious metal flows, and industrial demand improvements combine for strong performance,” said analysts at TD Securities.
ETF investors looking to get in on the silver action can look to funds like the iShares Silver Trust (SLV), which is up more than 4% Wednesday, 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 physically 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).
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