The iShares Silver Trust (SLV) has risen 19.6% since the beginning of the year. The rise in silver initially caused funds to flow to the metal. But the fall in silver took away its allure, and the funds flowing to silver were slowly depleted. SLV has fallen roughly 10.0% since Donald Trump beat Hillary Clinton in the US presidential election on November 8, 2016.
Treasury yields rose as investors prepared for possible inflationary pressures from Trump’s plan for mass-scale spending on infrastructure projects. A rise in inflation hurts long-term bonds, and yields rise. Remember that an increase in yields and bond prices are inversely related.
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A similar fall in the flow into funds is seen in the gold-based SPDR Gold Shares (GLD). It’s the most famous and actively used contract.
Investors are also becoming increasingly pessimistic about investments in precious metal–based stocks such as Primero Mining (PPP), AuRico Gold (AUQ), New Gold (NGD), and Alamos Gold (AGI). These miners have seen 30-day trailing losses of 15.8%, 18.1%, 7.5%, and 15.1%, respectively. Together, they make up about 4.5% of the fluctuations in the VanEck Vectors Gold Miners ETF (GDX).
Except for Primero, the year-to-date gains of these mining companies are positive due to the massive start-of-the-year rise in precious metal prices.