Silver Institute: ETPs 'Changed Landscape For Silver Investing'

The iShares Silver Trust (NYSE Arca: SLV), the first silver exchange-traded product that turns 10 years old on Thursday, has broadened the base of investors in the metal, says the Silver Institute. This is now the world’s largest silver-backed investment product with 330 million ounces and net assets of more than $5.5 billion, the Silver Institute says. The ETP trades like a stock but tracks the price of the commodity, with metal put into storage to back the shares. The silver ETP was launched on April 28, 2006, a couple of years after the first one in gold. The products give investors exposure to precious metals without having to take physical delivery, thereby avoiding storage, assaying and other charges. The Silver Institute notes that the majority of gold ETP holdings are from institutional investors, whereas silver ETPs have a higher proportion of retail investors. This might be why silver ETPs have tended to be more resilient than those of gold, the Silver Institute says. “The silver-backed ETPs have changed the investment landscape for silver investing by broadening the base of investors on a global basis,” says Michael DiRienzo, executive director of the Silver Institute. He says that investment in silver products was less than 100 million ounces in 2006. By contrast, after the end of the first quarter of 2016, silver held by global ETPs stood at 640 million ounces, he says.

By Allen Sykora of Kitco News; asykora@kitco.com

HSBC: Gold Investment Demand Ebbing But Physical Demand Picking Up

Wednesday April 27, 2016 08:59

HSBC says gold could be in for a period of consolidation with investment demand ebbing but signs that physical demand may be picking up. “The gold ETFs (exchange-traded funds) have ceased the rapid accumulation seen earlier this year, and prices have had a tough time getting back to the recent $1,282/oz high,” the bank says. “Net spec positions on the Comex jumped this year, but further builds may be difficult to achieve. This could weaken prices. But physical demand may be increasing and may offset the pullback in investor demand.” Data this week show that Chinese bullion imports from Hong Kong increased in March. Net imports totaled 64.1 metric tons, up from 42.9 in February and 61.8 a year earlier, according to the Hong Kong Census and Statistics Department. “This denotes a good recovery in demand from earlier in the year when imports dipped,” HSBC says. “The demand is all around, including coins, bars and jewelry, and is supported by higher physical deliveries from the Shanghai Gold Exchange and increased imports from Switzerland. This should keep gold steady, but further gains may be hard to achieve. This leads us to look for a modest period of consolidation.”

By Allen Sykora of Kitco News; asykora@kitco.com

BBH: FOMC Statement May Not Offer Much New Information For Investors

Wednesday April 27, 2016 08:59

The statement from the Federal Open Market Committee on Wednesday may not offer much fresh information for investors, say currency analysts at Brown Brothers Harriman. A hawkish Fed presumably would underpin the dollar and hurt gold, and vice-versa. “The FOMC statement will likely recognize the preliminary improvement in the global climate but also the soft patch in the U.S. economy,” BBH says. “However, it may still regard the global situation as fragile and look through the soft patch….Investors are looking for some insight into the June meeting, when three-quarters of economists -- according to a recent Wall Street Journal survey -- expect a hike. We do not expect the FOMC to take it off the table, nor can the FOMC make a commitment to it. At the end of the day, the information set (that) investors have may not be substantively changed.”

By Allen Sykora of Kitco News; asykora@kitco.com