New ETF Makes Investing in Silver Miners Even Easier

March 29, 2013 at 08:21

truthing

With silver looking even more alluring than gold lately, it’s smart to consider investing in silver miners – and a new ETF gives investors one more option.

The PureFunds ISE Junior Silver ETF (NYSE: SILJ), launched in November, differs from other silver mining ETFs in that it focuses only on junior silver miners.

The PureFunds Junior Silver ETF joins just two other silver mining ETFs, the Global X Silver Miners ETF (NYSE: SIL) and the iShares MSCI Global Silver Miners ETF (NYSE: SLVP).

While silver mining ETFs, like silver mining stocks and gold mining stocks, have not tracked the rise in price of the precious metals themselves – many are down anywhere from 10%-20% year to date – the tide is ready to turn.

Many signs point to increasing silver demand in the months ahead, and in recent weeks more money has started to shift out of gold and into silver. Investing in silver mining ETFs is one way to get out in front of this trend before the rest of the crowd.

“For 2013, I think silver, like gold, will set a new all-time nominal price record, likely reaching as high as $54 an ounce,” Resource Specialist Peter Krauth said in his 2013 silver price forecast.

Silver prices have languished so far in 2013, meandering from about $32 to about $28.50 currently.

But some technical analysts say silver prices have just about bottomed out and are poised for a big rally.

That’s being foreshadowed in a trend of increased buying of physical silver in recent months by silver-backed ETFs like the iShares Silver Trust ETF (NYSE: SLV). There’s also been unusually strong demand for Silver Eagle coins from the U.S. Mint this year.

What’s more is this latest projection that’s bullish for silver prices: Industrial demand for silver is expected to rise 7% this year and another 6% next year.

“People have been buying silver both as a base and precious metal,” Rohit Savant, a senior commodity analyst at the New York-based research company CPM Group , told Bloomberg News. “Economic demand will push prices higher.”

When silver prices do start to make their climb, expect silver miners to go along for the ride.