Retail Investors Drive Silver Buying Surge

Retail investors are currently flocking to silver, resulting in it being labeled the most crowded commodity trade right now, according to a recent report from Vanda Research.

Over the last month, retail investors have funneled about $921.8 million into silver-backed ETFs, including the iShares Silver Trust. Just on Wednesday, this particular ETF saw an influx of $69.2 million, marking it as the second-largest day for retail purchases since 2021, a period when retail activity significantly impacted prices.

So far this year, the ETF’s value has climbed by 31.3% and has skyrocketed 210.9% over the last year. On Thursday, silver prices reached $91.90 per ounce, rising from $72.62 during its initial trading year. However, it had dipped from the recent intraday peaks of over $93 earlier in the week, according to data from LSEG.

In addition, the MSCI ACWI Select Silver Miners Investable Index, which tracks mining companies sensitive to metal price changes, has jumped around 225% over the past year.

In 2021, the previous silver bull market coincided with a broader surge in retail investment in popular stocks like GameStop and AMC. Yet this time, Vanda asserts, there are more substantial reasons propelling silver’s growth.

They highlight that this isn’t merely a speculative surge; it’s a structural shift in the market that is even more pronounced than the earlier 2021 price spike. Investors seem to be recognizing silver as a “core macro trading asset” rather than just a fleeting gamble, especially since retail activity is also noteworthy in inverse leveraged funds targeting silver.

However, there’s a hint of caution among some investors. Kathy Chriskey, an expert in alternative ETF strategies at Invesco, remarked on the rapid rise of silver, noting how it took 45 years for the price to surpass $50 an ounce, yet it has quickly exceeded $80 in just a short span.