Silver exchange traded funds have regained their luster this year. Along with rallying with its golden counterpart as a safe store of wealth, silver bullion may be strengthening on increased industrial demand while global economies rebound.
Silver and other precious metals enjoyed safe-haven demand as the equities market plunged into a correction. The metal also maintained its momentum as the Federal Reserve lowered its interest rate outlook to only two hikes this year from a previously expected four rate hikes. Additionally, with the dovish Fed stance, the U.S. dollar weakened, which made USD-denominated silver cheaper for foreign buyers and a better store of value for U.S. investors. [Read: Silver ETFs Are Outshining Gold]
Looking ahead, the ongoing negative interest rate environment, with European and Japanese central banks cutting benchmark rates deeper into the red to promote growth, could push investors toward precious metals as a more stable store of wealth. [Read: Low-Rate Environment Will Help Support Gold ETFs]
Moreover, unlike gold, silver sees much higher industrial demand. The precious metal enjoys heavy industrial demand that benefits from an expanding global economy.
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