Silver prices have long been known for their volatility, as the precious metal rarely has a quiet day. As such, investors typically keep a close eye on the commodity. Though silver started off the year with a bang, it has since retreated, and it is now down about 5% on the year. Meanwhile, the U.S. economy has been surging, with the Down Jones Industrial Average breaking record highs last week [for more silver news and analysis subscribe to our free newsletter].
With silver sitting at lows and the economy sitting at highs, now may be a good time to hop back into the white metal. The iShares Silver Trust (SLV) is nearing initial support levels, which may also suggest that silver is due for a jump higher. But with stocks at all-time highs and investors increasing their risk appetite, it is difficult to say how silver will fare in the medium term.
A Short-Term Trade
For those looking to establish a short-term position, silver’s battered prices may present a strong opportunity. But with a position in the metal will come a fair amount of volatility; holding this metal is not for the faint of heart. A trade of this nature certainly falls under the Warren Buffett methodology of “being greedy when others are fearful,” as it seems that while markets cannot have a losing day it’s just the opposite for silver. Below, we outline several ways to make a short-term play on the white metal for those looking to get in on a possible rebound of the commodity.
- iShares Silver Trust (SLV): By far the most popular option out there, this physically backed ETF has nearly $10 billion in assets and trades more than 11.6 million shares on a daily basis. The fund is optionable, liquid and an investor favorite as far as silver trading is concerned [see also Exploring More Gold/Silver Manipulation Theories].
- 3x Long Silver ETN (USLV): For those looking to leverage their funds, this ETN will be a good option. USLV offers 300% exposure on silver futures and can be very effective during silver bull runs. Note that this process also works in reverse; if silver continues to tank, this fund will dole out a pretty hefty punishment.
- Silver Wheaton Corp (SLW): Silver Wheaton is a silver streamer/miner with a market cap topping $11 billion. Operating out of Vancouver, the firm has mines all around the world including some in Mexico, Greece and Sweden among others. The stock has been in a rut since the beginning of the year but looks to turn it around as silver poises for a comeback.
Disclosure: No positions at time of writing.