June may have proven to be a difficult month for silver investors, but it’s likely far too soon to give up on the precious metal. To better understand this, it’s important to contextualize why silver’s price is struggling and why the metal’s long-term opportunities are still there.
Key Takeaways:
- Silver’s price performance has been relatively turbulent since the Iran War began. The metal still has a strong long-term outlook.
- Silver’s outlook blends monetary fundamentals with industrial applications, creating potent tailwinds for the precious metal.
- For those looking to gain focused access to the silver industry, the Sprott Silver Miners & Physical Silver ETF (SLVR) invests in both physical silver and companies who mine it.
To start, silver’s earlier sell-off was primarily driven by the market responding to both the dollar and how the Fed is fighting inflation. Silver was not the only metal that struggled in this environment—gold faced similar tribulations.
However, it does have a significant difference that separates it from gold: its physical applications. The metal is used in manufacturing for a variety of key sectors, including the AI, electronics, automobile, and solar industries.
Crucially, these sectors are seeing significant momentum that can provide a long-term tailwind for silver. It’s no understatement that AI adoption has taken over the market and economy as a whole, and the components needed for both circuit boards and electrical infrastructure will be crucial in the ongoing buildout.
Given the role silver has to play in the construction of these components, silver traders can lean on this factor as a significant driver of demand. This could prove especially valuable, given how these industrial roles exist largely outside monetary policy.
“The longer-term outlook remains constructive,” noted Paul Wong, CFA, Managing Partner and Market Strategist at Sprott, in a recent report. “Silver’s unique combination of persistent supply deficits, expanding industrial demand, increasing monetary relevance, and tight physical market conditions provides multiple avenues for future appreciation.”
See More: Riding the Multi-Year Nuclear Bull Market With URNM
Ride the Silver Opportunity Wave With SLVR
Gaining targeted exposure to the silver industry can be easily achieved through the efficiency of the ETF wrapper. For instance, take a look at the Sprott Silver Miners & Physical Silver ETF (SLVR).
SLVR leverages Sprott’s expertise in navigating the metal markets by investing in both silver miners and physical silver itself. By allocating to both physical silver and silver miners, SLVR remains well-positioned to capitalize on a comeback for the precious metal. Those who are interested in betting on silver’s long-term opportunities may wish to give this fund a closer look.
For more news, information, and analysis, visit the Gold/Silver/Critical Minerals Content Hub.
Disclosures
An investor should consider the investment objectives, risks, charges and expenses carefully before investing. To obtain a Sprott Silver Miners & Physical Silver ETF Statutory Prospectus, which contains this and other information, visit https://sprottetfs.com/slvr/prospectus contact your financial professional or call 1.888.622.1813. Read the Prospectus carefully before investing
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, URN, COPP, COPJ, NIKL, SGDM, SGDJ, SLVR, GBUG, METL, and REXC.
Physical Bullion Funds: PHYS, PSLV, CEF, and SPPP.
Gold and precious metals are referred to with terms of art like store of value, safe haven and safe asset. These terms should not be construed to guarantee any form of investment safety. While “safe” assets like gold, Treasuries, money market funds and cash generally do not carry a high risk of loss relative to other asset classes, any asset may lose value, which may involve the complete loss of invested principal.