Market volatility continues to push gold higher, while industrial demand could sway silver’s price moving forward. Given this, investors may want to use caution if looking to add silver exposure.
This year, silver’s rise has been more muted when juxtaposed with gold’s rally. Silver’s duality as a precious metal and industrial metal, however, means it can be prone to the whims of the broader market that’s predicated on the health of the economy.
With the financial market news cycle circulating the recession word, this could add downward price pressure to silver. The ongoing impact of tariffs could add more market jitters, especially if the economic data supports the notion that the economy is in fact slowing.
“Long supported by industrial demand, the silver market is also benefiting from its reputation as a safe-haven asset,” Investing News Network noted. “However, mounting economic uncertainty has rattled investors in recent months.”
Bullish silver investors who remain undeterred can attain exposure via the Sprott Physical Silver Trust (PSLV). The fund provides exposure to silver without the logistical hassle of storing the physical metal.
PSLV invests in unencumbered and fully allocated London good delivery silver bars. Additionally, shareholders can redeem their shares for physical bullion anywhere in the world (subject to certain minimum conditions) if they want a more tangible investment experience.
An Active Option for Silver & Gold
With silver’s price more tenuous compared to gold due to economic uncertainty, investors may want to opt for gold while maintaining silver exposure for its growth potential. Silver’s electrical conductivity properties could mean the push toward more electric energy use would result in higher demand for silver.
Investors who want the duality of both silver and gold should consider an alternate ETF play that focuses on miners. This is available via the Sprott Active Gold & Silver Miners ETF (GBUG). When precious metals like gold and silver move toward the upside, mining stocks can typically follow. Furthermore, mining stocks can exhibit a latency effect, allowing investors to build positions after the physical metal has already experienced price gains.
Pliability in Precious Metals Space
In addition, the fund is actively managed, meaning portfolio managers of GBUG can adjust the holdings of the fund based on current market conditions. That allows for pliability in the precious metals space. GBUG contains holdings of companies engaged in, among others, mining, developing, exploring, and financing operations in relation to gold and silver. For those looking to maximize diversification in these metals, this is an ideal fund.
For more news, information, and analysis, visit the Gold/Silver/Critical Minerals Channel.
An investor should consider the investment objectives, risks, charges, and expenses carefully before investing. To obtain a Prospectus, which contains this and other information, contact your financial professional or call 888.622.1813. Read the Prospectus carefully before investing, which can also be found by clicking one of the links below.
Past performance is no guarantee of future results. One cannot invest directly in an index. Funds that emphasize investments in small/mid-cap companies will generally experience greater price volatility. Diversification does not eliminate the risk of investment losses. ETFs are considered to have continuous liquidity because they allow an individual to trade throughout the day. A higher portfolio turnover rate may indicate higher transaction costs and may result in higher taxes when Fund shares are held in a taxable account. These costs, which are not reflected in annual fund operating expenses, affect the Fund’s performance.
Sprott Asset Management USA, Inc. is the Investment Adviser to the ETFs. ALPS Distributors, Inc. is the Distributor for the ETFs and is a registered broker-dealer and FINRA Member. ALPS Distributors, Inc. is not affiliated with Sprott Asset Management USA, Inc. or VettaFi.
Exchange Traded Funds (ETFs): SETM, LITP, URNM, URNJ, COPP, COPJ, NIKL, SGDM and SGDJ
