Over the course of 2024, silver outperformed the S&P 500 by a significant margin. Whereas the precious metal posted a 35% gain, the benchmark index marked a 25% gain. In fact, silver even outperformed gold’s 2024 return, which stood at roughly 26.3%.
Silver, much like its gold-hued cousin, is benefitting from a sort of “dual appeal” as of late. Both the commodities are tried and tested as hedges against inflation and stores of wealth. However, their recent outperformance has also led to a flurry of interest from speculative investors.
Per the Silver Institute, the dance of supply and demand is trending in the direction of less supply and more demand. The glimmering grey metal enjoys steady demand from industrial and military applications — as well as a growing role in the green energy revolution.
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So, is investing in silver directly a good idea? Most likely — but there might be a simpler and more profitable way to benefit from the precious metal’s bullish tendencies.
Miners undervalued — could this silver ETF go on a bullish run?
The Global X Silver Miners ETF (NYSEARCA: SIL) provides exposure to silver mining companies. In contrast, most silver ETFs track the price of silver through physical holdings. As a result, SIL tends to be more volatile — but in a bull market, that volatility can lead to outsized gains.
At press time, SIL was trading at a price of $36.41, and had marked a 14.60% rally since the beginning of the year.
Otavio Costa, a Crescat Capital macro strategist, highlighted the fact that SIL is reaching a 14-year line of resistance in a March 9 post on social media platform X.
Up until 2022, the silver ETF’s price action closely mirrored that of the commodity. Since then, however, price action has diverged — relative to the precious metal, silver miners are currently quite undervalued. Per Costa, if silver prices are any indication, a breakout appears imminent.
Moreover, President Trump’s decision to wage a tariff war on geopolitical rivals and allies alike serves to spur on significant gains for the precious metal and this silver ETF. Resurgent inflation or a recession would serve to increase demand for silver as a hedge and store of value.
Finally, Shawn Khunkhun, president and CEO of mineral exploration company Dolly Varden Silver, outlined a case as to how silver could reach a price of $73 per ounce. Per Khunkhun, silver’s dual role as an industrial and monetary asset, together with rising trade tensions, will sustain positive price action for at least the next two years. If his analysis proves correct, there is little doubt that the price of silver ETFs would also experience a strong rally.
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