As global tensions and market uncertainty continue to escalate, silver prices are experiencing a significant rise. This surge has resulted in notable gains for silver-linked ETFs in recent trading sessions.
What Happened: According to Benzinga Pro on Thursday several silver-linked ETFs have benefited from this surge. abrdn Physical Silver Shares ETF (NYSE:SIVR) is up 1.28% in the premarket, with a year-to-date return of over 42.01%. iShares Silver Trust (NYSE:SLV) is up 1.27% in the premarket, boasting a year-to-date return of over 41.85%. abrdn Physical Precious Metals Basket Shares ETF (NYSE:GLTR) is up 1.48% in the premarket, with a year-to-date return of over 30.29%.
These ETFs aim to reflect the performance of silver prices, less their expenses. They hold physical silver bullion, providing investors with exposure to silver price movements without the need to physically own and store the metal.
The silver prices have been making substantial gains due to escalating tensions in the Middle East, interest rate cuts by the European Central Bank (ECB), and uncertainty surrounding the upcoming U.S. election. These factors have increased the demand for safe-haven assets like silver.
Comex silver prices have remained above $34.43 per ounce, marking their highest levels in 12 years. This month, Comex Silver has seen an 11% increase, its largest monthly gain since May 2024. Year-to-date, silver prices have risen by 46%, outpacing gold's 33.3% rise.
Why It Matters: The rally in silver prices came after gold reached an all-time high with experts saying that gold 'is getting its moment in the Sun.' Gold earlier this year outperformed Bitcoin, suggesting that cryptocurrencies may not be the effective hedge against lower interest rates, a declining dollar, and financial instability that Bitcoin proponents had anticipated.
Gold and silver are often viewed as a safe-haven investment in times of economic and political uncertainty. The precious metal can also serve as a hedge against declines in the value of the U.S. dollar.
Meanwhile, the unexpected surge has put five U.S. banks at risk of substantial financial losses due to their large short positions in the metal. This amounts to approximately 707.9 million ounces, nearly equaling a year's global silver production. With silver prices increasing by $1.84 per ounce, these short positions are now estimated to be underwater by $1.3 billion.
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This content was partially produced with the help of Benzinga Neuro and was reviewed and published by Benzinga editors.
