Tariff Threats Boost Silver & Copper Prices

The fear of trade wars was made apparent as silver and copper prices ticked higher in last week’s trading session. Traders are placing bets that the incoming president will impose tariffs on silver/copper imports, potentially sparking a global trade war.

“The fresh spike in premiums comes as uncertainty and anxiety over the likely scope of Trump’s trade policies ramps up across financial markets ahead of his Jan. 20 inauguration,” Bloomberg reported. “The Washington Post reported his team are planning narrower import tariffs on critical goods, potentially including copper, though Trump denied the story.”

Additionally, investors could be seeking ways to hedge against sticky inflation by diversifying their assets to commodities like silver and copper. A hotter-than-expected labor market could quash the notion of more rate cuts to come, causing investors to position their portfolios for more inflation.

“Investors around the world have started the year looking for protection against sticky and potentially rising inflation, fiscal debt worries and the unpredictability of Trump,” said Ole Hansen, head of commodities strategy at Saxo Bank.

With the potential for price increases, this opens the door for opportunities in silver and copper exchange-traded funds. Furthermore, the ongoing push for alternative energy sources will continue to add more fuel to the proverbial flame for global electrification. With that, silver and copper are poised for growth given their high usage in electrical energy technology. This potential growth exposure highlights a pair of funds from Sprott.

When it comes to getting silver exposure, consider adding the Sprott Physical Silver Trust (PSLV A+) to a portfolio. The fund invests in unencumbered and fully allocated London good delivery silver bars, giving investors the tangible feel of investing in physical silver without the storage issues. 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.

For copper specifically, investors should consider the Sprott Copper Miners ETF (COPP A-). The fund tracks the Nasdaq Sprott Copper Miners Index (NSCOPP), which tracks the performance of a selection of global securities in the industry. That includes producers, developers, and explorers that support the industry. For diversification,  COPP provides blanket exposure to this mining industry by focusing on large-, mid-, and small-cap mining companies.

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