Silver exchange traded funds could continue to outperform their gold counterparts as improving industrial demand helps support the rally.
Among the best performing non-leveraged ETFs of Monday, the ETFMG Junior Silver Miners ETF (NYSEArca: SILJ) advanced 5.7% and the Global X Silvers Miners ETF (NYSEArca: SIL) rose 4.4%.
Meanwhile, the Aberdeen Standard Physical Silver Shares ETF (SIVR) advanced 3.9% and the iShares Silver Trust (SLV) was up 3.8%. The SPDR Gold Shares (NYSEArca: GLD) was 1.3% higher. Comex gold futures pushed 1.4% higher to $1,793 per ounce and Comex silver futures increased 4.4% to $27.0 per ounce.
The World Bank has a positive silver outlook. Analysts argued that silver prices could rise 22% this year, Kitco reports.
“Prices were lifted by a rebound in industrial demand (electronics, autos, and solar power), which accounts for more than half of silver consumption (compared to less than 10 percent for gold). Investment demand has also been robust, with investors holding net-long positions since mid2019,” World Bank analysts said.
On the other hand, analysts anticipate gold prices could fall 4% this year on weakening investment demand due to an improving economy and rising bond yields.
“Higher real yields make gold less attractive to investors. Gold-backed exchange-traded funds holdings have also fallen sharply in recent months, and central banks have reduced gold purchases. Physical demand is recovering from a substantial decline in 2020 but remains well below pre-pandemic levels,” the analysts added.
Silver also led gains on Monday as the U.S. dollar depreciated and a reported revealed U.S. manufacturing cooled in April, boosting demand for safe haven assets, Bloomberg reports.
According to an Institute for Supply Management report released Monday, a gauge of factory activity dipped in April from a more than 37-year high in the previous month.
A weaker-than-expected ISM reading suggests “we’re not running at full speed as many had expected, and that ultimately means that we’re probably not gonna have any letup on the easing,” according to TD Securities analyst Bart Melek.
For more information on the precious metals market, visit our precious metals category.