It has been investment that has been driving silver in 2009, and so, once again, silver’s behaviour has been more like that of gold. How do these flows compare?
According to The Silver Book, an investment research from V M Group, supporting both gold and silver has been great demand from the exchange-traded funds (ETFs) and the futures market at Comex in New York.
There are three silver ETFs: the market-leading Barclays Global Investors (BGI), which is based in New York; and two in Europe, ETF Securities in London and ZKB in Zurich. By late April these had 8,413t, 534t and 1,422t respectively, totalling 10,394t. This is 2,140t more than at the end of 2008, a year when 2,325t were added in total.
How do these flows compare to those into gold ETFs? In late April 2009 the 15 gold ETFs held 1,643t, up 454t in the year, much more than the 321t taken in the whole of 2008. Total holdings of silver ETFs are thus 6.3 times that of gold, while inflows this year so far have been a smaller 4.7 times the size of gold’s.
Drilling down further, whereas in January they were 8.1 times gold, in February they were just 3.2 times and in March just 1.7. However April saw inflows into silver, but a net outflow for gold.