Fair note : I’ve traded silver a few times and gotten stopped out already.
But I bought some silver paper today. As always, I never trade the physical stack. The physical slowly accumulates, thats all it does. But silver does look like it wants to break out to the upside :
Silver price (SLV ETF)
Also, I find it interesting that there was a strange record inflow to the SLV ETF of 572 tons (approx. half-a-billion worth). I’m suggesting this is accounting shenenigans and nothing else, but its still interesting.
I was the head of a commodities ETF desk if you need some advice on commodities ETFs. Be careful who is the issuer of the ETF. Check the prices of AIG ETFs back on Sep 15th 2008 (they went to $0 for a few days until AIG got bailed. SLV is iShares so you should be ok. Also always check the shape of the forward curve of the commodities before trading a commodities ETF. Remember that when the forward curve is for instance 50% in backwardation over a year and you short the ETF, then you need the spot price of the commodity to go down by more than 50% over the year to make money. Otherwise you will lose. So technical analysis on ETFs is really a BIG cognitive bias.
When you trade a commodities ETF, you are betting on the difference between the future spot price of the commodities and the current forward prices. With SLV you do not have this problem because the curve is usually flat (with 0% interest rate) but be careful.
It might become interesting to buy commodities ETFs because JP Morgan is creating this physical copper ETFs. They are probably doing it for a reason.
Most ETFs are of course worthless as anything but trading vehicles. And I am fully aware of the counterparty risks – thats one of the main reasons I choose to put most of my money in physical metal and mining stocks.
Interesting that a Copper ETF is in the planning….
Also CTA hedge funds who trade commodities on technical analysis have been losing money for several years now. There are other great trading strategies for commodities that do not involve technical analysis.
Oh. Just also careful with the US gov. I remember it was I believe 1st April 2011 when Silver prices dropped 13% during Asian hours. It was a market manipulation of course. But leverage is not always your friend. And well obviously never trade short and leverage ETFs if you want to keep them for more than a few days (compounding issue with volatility). You can check LNGA LN (leveraged nat gas) to see what I mean.