Silver ETFs Offering Value Against Gold Rivals

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The iShares Silver Trust (NYSEArca: SLV) and ETFS Physical Silver Shares (NYSEArca: SIVR) are each down more than 2% year-to-date while rival gold exchange traded products are trading higher, but some commodities market observers see opportunities in silver.

Heading into 2018, silver was one of the top picks in the commodities complex among traders and money managers. Moreover, unlike gold, silver sees much higher industrial demand. The precious metal enjoys heavy industrial demand that benefits from an expanding global economy.

ETF Securities “reiterated its forecast for the precious metal to trade in a range between $19 and 20 an ounce by the end of the year. March silver futures last traded at $16.65 an ounce, down 0.37% on the day. Currently, silver prices are down almost 2% since the start of the year as the market has been unable to hold a critical psychological level at $17 an ounce,” reports Kitco News.

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.

“In a recent report, Maxwell Gold, director of investment strategy and research at ETF Securities, said that he still expects silver to outperform gold this years, as investors adjust to growing industrial demand due to renewed global economic growth,” notes Kitco. “Because of the high gold/silver ratio and silver prices below $17 an ounce, Gold said that it is only a matter of time before investors start to take more interest in the white metal. He added that current prices represent an attractive entry point for long-term investors.”

Silver, like gold, could get a lift from rising inflation.

“Along with growing industrial demand, Gold said that silver could also outperform well on the investment side as investors look for assets to hedge against inflation,” reports Kitco. “Gold is seen as a traditional inflation hedge, but Gold's research has shown that base metals, including silver, show stronger returns in a rising inflationary environment.”

Investors can tap silver equities with the Global X Silvers Miners ETF (NYSEArca: SIL) and related ETFs. SIL, the largest silver miner-related ETF, tries to mirror the Solactive Global Silver Miners Total Return Index, which is also comprised of global silver miners.

For more information on the silver market, visit our silver category.

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