The iShares Silver Trust (NYSEArca: SLV) and the ETFS Physical Silver Shares (NYSEArca: SIVR) are down 2.3% in the past month, but investors may want to consider seasonal trends relevant to silver before going bargain-hunting with the white metal.
Silver has a tendency to peak in mid-May before trending lower through the end of June. “Traders can look to sell silver on or about May 14 and maintain a short position until on or about June 25. In the past 41 years this trade has seen declines 28 times for a success rate of 68.3%,” according to the Stock Trader’s Almanac.
Shorting silver on or around May 14 has produced gains in eight consecutive years and nine of the past 11, data from Stock Trader’s Almanac indicate.
Although global silver ETFs saw modest outflows last week, SLV, the largest silver ETF, has raked in nearly $89 million in new assets this month. [Improving Sentiment Lifts Commodities ETFs]
However, SLV resides less than 6% above its 52-week low and the ETF has not traded above its 200-day moving average since March. The same can be said of SIVR.
Investors that can stomach the volatility while profiting from a potential seasonal silver dip can turn to the ProShares UltraShort Silver (NYSEArca: ZSL).
ZSL attempts to deliver twice the daily inverse performance of silver bullion as measured by the U.S. Dollar fixing price for delivery in London.