Why is Silver underperforming the other precious metals?

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January 21, 2019 2:16pm NYSE:SLV

long and stacked silver bars

From Joe Richter & Susanne Barton:

(Bloomberg) — Silver just completed its worst year in three. Investors are showing no signs of taking a shine to the metal in 2019, either.


The commodity has erased its 2019 gain, while gold, platinum and palladium hold onto theirs. Silver futures on Friday posted the biggest weekly loss since November.

Analysts say silver is getting hit from at least two sides as investors are turned off by its status as both a haven and industrial commodity. Optimism over trade talks is boosting equities and curbing demand for shelters from market turmoil. At the same time, caution over the broader economic outlook dims industrial-demand prospects at a time when silver is plentiful.

Silver has an industrial component, and industrial metals have been “weighed down by slowing global growth concerns,” said Daniel Ghali, a TD Securities commodities strategist. For today, you would expect a “boost to prices because of increasing hopes of a U.S.-China trade deal. But there’s still loads of inventory weighing on the metal’s price.”

“There’s absolutely no shortage of silver around,” Tai Wong, head of base and precious metals derivatives trading at BMO Capital Markets, said by phone. “People bought silver on the back of gold rather than on solid fundamentals. As soon as gold retreats the desire to hold silver fades quickly.”

To contact the reporters on this story: Joe Richter in New York at jrichter1@bloomberg.net;Susanne Barton in New York at swalker33@bloomberg.net

To contact the editors responsible for this story: Luzi Ann Javier at ljavier@bloomberg.net, Joe Richter, Joe Carroll


The iShares Silver Trust (SLV) closed at $14.37 on Friday, down $-0.20 (-1.37%). Year-to-date, SLV has declined -10.13%, versus a 0.25% rise in the benchmark S&P 500 index during the same period.

SLV currently has an ETF Daily News SMART Grade of C (Neutral), and is ranked #9 of 35 ETFs in the Precious Metals ETFs category.


This article is brought to you courtesy of Yahoo Finance.


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