Industrial or precious?
Silver is popular among investors who want to hedge against the overall risk in the market as well as those who want to link their gains to industrial performance.
Silver often plays the dual role of haven asset and industrial metal. Silver isn’t preferred as much as gold during market turbulence. It has a comparatively small role as a store-of-value metal.
Silver is extensively used as a material in the production process of electronics, solar products, and much more. Thus, the demand for silver can surge with a rise in industrial product demand. Year-over-year (or YoY), the demand for silver has risen as a raw material used in production processes.
2016 was turbulent for silver, as its haven bids rose during the start of the year amid global turmoil.
Silver funds and miners
Silver has been plunging over the past few years, despite surging demand for its industrial usage. Fundamentally, silver seems to be strong due to rising demand and a YoY shortfall in its supply.
Fluctuations in silver can also be tracked by way of investment in silver-based funds such as the iShares Silver Trust ETF (SLV) and the Physical Silver ETF (SIVR). These two funds closely follow the changes in silver and have risen almost 9.5% year-to-date.
Silver miners such as First Majestic Silver (AG), Pan American Silver (PAAS), Coeur Mining (CDE), and Hecla Mining (HL) tend to follow silver’s lead. These miners have performed better than their precious metals counterparts over the past month.