How Silver-Based Funds Plunged Their Way through April 2017



Silver’s slump

Precious metals were doing considerably well until the first half of April 2017. As investors’ risk appetites revived, haven assets slumped. Gold, silver, platinum, and palladium have fallen 2.3%, 3.5%, 1.4%, and 1.1%, respectively, in the past five trading days.

Among these metals, silver has plummeted the most with a trailing-30-day fall of 10.8%. It’s been on a continuous downtrend for the last 15 trading days, and it’s currently at its lowest level since January 2, 2017.

[marketrealist-chart id=2081481]

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Silver funds

The slump in silver took famous silver-based funds along for the ride. The iShares Silver Trust ETF (SLV) and the Physical Silver Shares ETF (SIVR) saw trailing-30-day falls of 5.5% and 5.4%, respectively. They had a YTD return of more than 14% in the first week of April. On May 8, this return fell to just under 2.1%.

Bottoming RSI level

As we can see in the chart above, SLV has fallen to almost $15.5 per share. The fund has likely reached oversold territory, as it reached its 14-day relative strength index (or RSI) of 27 at the start of May. With the fund’s fall in price, its RSI could have fallen further. An RSI level of below 30 indicates the possibility of a pullback in price.

The falls in precious metals have left not only a negative impact on metals-based funds but also on other mining funds and shares. Some mining companies that have seen their YTD gains turn into YTD losses include Alamos Gold (AGI), B2Gold (BTG), Newmont Mining (NEM), and Yamana Gold (AUY). These companies’ stocks have fallen 7%, 4.6%, 4.1%, and 11%, respectively.


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