Silver Slips As Economy Roars Forward

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

SilverFor 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.

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Disclosure: No positions at time of writing.

This entry was posted in Actionable Ideas, Asset Allocation, Commodity Futures, Precious Metals, Silver and tagged , , . Bookmark the permalink.

Commodity HQ is not an investment advisor, and any content published by Commodity HQ does not constitute individual investment advice. The opinions offered herein are not personalized recommendations to buy, sell or hold securities or investment assets. Read the full disclaimer here.

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