5 Reasons Silver ETFs Will Remain in the Spotlight

Gold ETFs been gobbling up most of the headlines as inflation concerns refuse to abate, but silver ETFs are worth a mention in this recovery climate, too.

But first, the ETF industry has a new player in ETF Securities. They’ve launched the ETFS Silver Trust (SIVR), which holds physical silver. The fund has an expense ratio of 0.30%. This is just the first of several funds for which the provider has filed, and we’ll write about it as it happens.

There are several factors Melissa Pistilli for Silver Investing News gives as to why silver might be deserving of a little more attention:

• Silver may continue its slow and steady rise to commodity hot shot as industrial demand continues;
• A faltering U.S. dollar mixed with high oil prices can give silver a safe-haven appeal;
• Silver, known as “the poor man’s gold” can have a role as an inflation hedge, too;
• The general perception of silver may eventually move more in line with reality;
• As much as 75% of silver’s production comes from gold, copper, lead, and zinc mining, which is why changes in these other industries have a large impact on the price of silver; company stocks have been on the rise, reports Daily Futures on Commodity Online

• iShares Silver Trust (SLV) up 20.7% year-to-date

Comments

[philskie:]

Could someone explain exactly what are the fundamental differences in accounting for three major investment areas of silver. COMEX, SIVR and SLV. What are the implications for the investor and what are the effects these holdings will have on the stability of the silver market?

Jul 27 12:38 PM

[Tom Lydon:]

Commodity ETFs that hold physical metals, like SLV,COMEX and SIVR, are taxed at ordinary income rates upon sale.
www.etftrends.com/2009...

Jul 27 05:46 PM

[JGL:]

Do the above comment imply that buying a silver ETF is recommended over a Gold one (e.g. GLD)?

Jul 28 08:14 AM

[Uncle Pie:]

When I was young, silver was used in coinage, in photography and in the dining room, for flatware, candlesticks, etc, and not just by the wealthy. Today you seldom see anything that contains silver. Where has it all gone and why should anyone be interested in it?

Jul 28 11:19 AM

[auto44:]

When I was Young silver was $2.00 an oucnce. Today silverplate is the standard and really expensive when coompared to the cost of the material used in their manufacture. Sterling is 92.5% silver which most of the things Uncle pie asked about were made of is now outa sight, it is available but way to costly for average wedding gift.

Jul 28 12:25 PM

[Ian Cassel:]

I also own some silver coins. If you really want to meet interesting people, talk to the silver-bug crowd. Some of the most flamboyant, off the wall people you will ever meet. They will only be happy when silver is $500/oz which means we would likely be back to a barter society.

Jul 28 01:40 PM

[Tom Lydon:]

JGL,
Silver is just another way to access precious metals in a cheaper way then Gold that offers some of the same benefits as Gold such as hedging or inflation protection. GLD is a great way to gain exposure to Gold.

-Tom

Jul 28 01:57 PM

[lefty2guns:]

"are taxed at ordinary income rates upon sale."

I am rather new to this, apologies for the stupid question, ordinary income rates upon sale, does that mean capital gains tax or are ETFs exempt from this and just fall under ordinary income tax?

Jul 28 01:57 PM

[Tom Lydon:]

Uncle Pie,
Silver is primarily used in industrials, jewlery, silverware and photography. It has superior properties that makes it very attractive for industrial use such as superconductivity. Below is a link that outlines some of silver's uses.
www.etftrends.com/2009...

Jul 28 02:03 PM

[Mbuna:]

precious metal ETF's need more of this kind of exposure to force the facts to come to light. Courtesy of Zero Hedge, of course.

www.zerohedge.com/arti...

Jul 28 04:25 PM

[Mbuna:]

and for your continued perusal

www.gata.org/node/7586

Jul 28 04:32 PM

[437339:]

Re

There is 5x more gold above ground than silver . ALSO , once gold is mined , it doesn't go away . Most of mined silver is USED -UP + gone when used , ie photography ,batteries, cell phones , flat screen computers ,etc

Jul 28 10:02 PM

[Tom Lydon:]

Ordinary income rates are the rates that your ordinary income, like W-2 wages for example, are taxed at. In regards to ETFs, all ETFs are not taxed in the same manner and most are subject to capital gains taxes at time of sale. As for the commodity ETFs mentioned here they are taxed differently than a broad based ETF like the SPY. Below is link that explains tax treatment in a little more detail.
www.etftrends.com/2009...


On Jul 28 01:57 PM lefty2guns wrote:

> "are taxed at ordinary income rates upon sale."
>
> I am rather new to this, apologies for the stupid question, ordinary
> income rates upon sale, does that mean capital gains tax or are ETFs
> exempt from this and just fall under ordinary income tax?

Jul 29 11:52 AM