The uncharacteristically strong performance this year by the SPDR Gold Trust ETF (GLD), which is up nearly 33%, might be overshadowing the quiet strength of the other major precious metal, silver.
According to the etf.com ETF Pulse research tool, the Abrdn Physical Silver Shares ETF (SIVR) and the iShares Silver Trust (SLV) are up nearly 41% from the start of the year.
The strong gains mark the best run for silver since 2020 and position the two ETFs that give investors pure exposure to the precious metal to finish the year ahead of the 47% full calendar-year return in 2020.
“Silver is playing catch up with gold, which is normal behavior,” said Paul Schatz, president of Heritage Capital in Woodbridge, Conn.
If silver is chasing gold, it is doing a good job. GLD is having its strongest year in more than a decade, fueled by a raft of issues including geopolitical unrest, inflation fears, and central bank purchasing.
Silver, which is not typically seen as an inflation hedge, is riding higher on some of the same things driving the price of gold, with the addition of increased industrial demand paired with supply deficits.
Comparing gold to silver as an investment, Schatz described silver as “higher beta and more speculative.”
He also pointed to the fact that, at $33 an ounce, silver is currently trading about 34% below the $50 peak it hit in 2011.
“Before the final precious metals peak, silver should at least test $50 if not exceed it in a wild speculative boom,” Schatz said. In a price pullback, Schatz said he would be a buyer of silver.
Meanwhile, not everyone is on board the precious metals train.
“Metals are too difficult to keep tabs on; they are just too volatile to be added to our models,” said Tim Holsworth, president of AHP Financial in Midland, Mich.
In terms of net inflows this year in the commodities category, GLD takes the prize with over $2 billion, followed by SLV at $1.4 billion.
Third place for net flows into commodity ETFs is GLD’s lower-cost cousin the SPDR Gold MiniShares Trust (GLDM) with $869 million worth of inflows this year through October.
