The rush into the “safety” of the dollar took a bite out of silver today, driving futures to settle at a three-month low. Is it time to pick up some holdings in the iShares Silver Trust (SLV) or theETFS Silver Trust (SIVR)?
Take the longer view and the metal could still be attractive, per Morgan Stanley’s Hussein Allidina and Peter G. Richardson. They’re positive on silver amid negative real interest rates that just about everybody expects to persist for a prolonged period. Low rates should “underpin a solid core of investment demand” and have a “quarantining” effect on ETF holdings, they write in a note this week. The key risk they cite: The weak economy this year and possibly next could crimp silver’s price but not by enough to convince producers to scale back and avoid stockpiling the stuff.
Silver’s Three-Month Low: A Buy? - Focus on Funds - Barrons.com