The silver market has been on fire recently, with the industrial precious metal breaking above $26 an ounce once again on Tuesday, driving silver ETFs higher in the prices.
The market has been consolidating over the past week, with the pullback making investors wonder if they had missed the big move higher.
Technical analysis from FXStreet.com stated that “Silver is being squeezed in a narrowing price range for the eighth trading day. At press time, the metal is trading largely unchanged on the day at $24.31 per ounce. The 4-hour chart shows the metal has carved out a pennant pattern. A break above the pennant resistance, currently at $24.56, would confirm the breakout and signal a continuation of the rally from the July 17 lows near $19. That would expose the recent high of $26.20.”
Other analysts suggested silver also had a shot at reaching recent highs.
“Silver has made an attempt to settle below the support level at $23.25 but this attempt was not successful so silver stays in the range between the previous support at $24.00 and support at $23.25.In case silver settles below the support at $23.25, it will head towards the next support level at $22.30. On the upside, silver will likely face some resistance at the previous support level at $24.00. If silver manages to get above this level, it will head towards the next resistance level at $24.95. A move above $24.95 will likely provide silver with an opportunity to test the recent highs at $26.20,” according to analysts at FXEmpire.
With ETFs like the iShares Silver Trust (SLV) gaining 5.67% Tuesday, a move higher in silver and in gold as well has both investors and physical holders of the precious metals excited by the exploding prices.
Sellers at local pawn shops and jewelry stores are anxious to take advantage of the spike in metals prices.
“The old jewelry is amazingly valuable. People come in every day. They’re completely impressed by the numbers they see,” said Mike Miller, of The Coin Shop in Ohio.
“We had one lady that came in, she had some gold coins she had inherited. She walked out with a $50,000 check. Another lady came in with her girlfriend with a baggie of jewelry thinking it was a couple of hundred bucks and ended up with over $4,000. She actually had tears,” Miller said.
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 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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