Silver-traded funds could outperform their gold peers further as stronger industrial demand helps support the rally.
Among the best performing ETFs of Monday without leveraging ETFMG Junior Silver Miners ETF (NYSEArca: SILJ) grew by 5.7% and ETF Global X Silvers Miners (NYSEArca: SIL) grew by 4.4%.
Meanwhile Aberdeen Standard Physical Silver Shares (SIVR) Stock ETF grew by 3.9% and iShares Silver Trust (SLV) grew by 3.8%. IN SPDR Gold Shares (NYSEArca: GLD)was 1.3% higher. Comex gold futures climbed 1.4% to $ 1,793 an ounce, while Comex silver futures rose 4.4% to $ 27.0 an ounce.
The World Bank has a positive outlook for silver. Analysts said silver prices could rise 22% this year, Kitco said.
“Prices were boosted by a rebound in industrial demand (electronics, cars and solar), which accounts for more than half of silver consumption (compared to less than 10 percent for gold). Investment demand has also been robust, with investors holding net long positions since mid-2019, ”said World Bank analysts.
On the other hand, analysts expect gold prices to fall 4% this year due to weakening investment demand due to an improved economy and rising bond yields.
“Higher real returns make gold less attractive to investors. Gold-backed ETFs have also plummeted in recent months, and central banks have cut gold purchases. Demand for physical products is recovering from a significant drop in 2020, but remains well below the pre-pandemic level, ”added analysts.
Silver also showed gains on Monday as the US dollar depreciated and US production declined in April, boosting demand for safe assets, Bloomberg reported.
Manufacturing activity in April fell from more than 37-year highs in the previous month, according to a report from the Institute for Supply Management released on Monday.
According to TD Securities analyst Bart Melek, the weaker-than-expected ISM numbers suggest that “we are not operating at full speed as many expected, and this ultimately means that we are probably not going to give up on easing.”
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