23 May 2024: Wealth Product Ideas
Silver Rally
- Surging silver prices. Silver prices recently surged to nearly $32 per ounce, the highest level since December 2012, reflecting a YTD increase of almost 33%. This rise mirrors the upward trend in the gold market, driven by optimism that the Federal Reserve may start cutting interest rates as early as September.
- Rate cut expectations. Gold and silver prices inched up slightly, nearing a record high, as recent economic data fuelled expectations of a US Federal Reserve rate cut later this year. Lower-than-expected consumer price increases in April suggested a downward trend in inflation, bolstering hopes for a September rate cut, although Fed officials remain cautious about achieving the 2% inflation target. Gold is typically seen as a hedge against inflation, but higher interest rates can make holding non-yielding assets like gold and silver less attractive.
- Increasing geopolitical tensions. Silver’s appeal as a safe-haven asset has been bolstered by rising geopolitical tensions. The recent helicopter crash that killed Iranian President Ebrahim Raisi and Foreign Minister Hossein Amirabdollahian has heightened global uncertainties. Additionally, ongoing conflicts such as the US-China trade war, the Russia-Ukraine war, the Red Sea crisis, and the Israel-Hamas war continue to fuel instability. This persistent geopolitical uncertainty is likely to drive up prices for both gold and silver.
- Increasing demand for solar power. The booming solar power industry is driving a surge in silver demand due to its high electrical conductivity, thermal efficiency, and optical reflectivity, which are essential for manufacturing solar photovoltaic panels. According to the International Energy Agency, global investment in solar PV manufacturing more than doubled last year to approximately $80 billion, representing around 40% of global investment in clean technology manufacturing. China also more than doubled its investment in solar PV manufacturing between 2022 and 2023. As the country continues its transition toward green energy, the demand for solar photovoltaic manufacturing is expected to remain strong. This boom in the solar power industry is likely to continue driving the demand for silver in 2024.
10-year Gold/Silver ratio chart
10-year average trend line: 79.1118
(Source: Bloomberg)
Fund Name (Ticker) | Global X Silver Miners ETF (SIL US) |
Description | The Global X Silver Miners ETF provides investors access to a broad range of silver mining companies. |
Asset Class | Equity |
30-Day Average Volume (as of 20 May) | 881,839 |
Net Assets of Fund (as of 20 May) | USD1,210,000,000 |
12-Month Yield (as of 20 May) | 0.4696% |
P/E Ratio (as of 17 May) | 29.67 |
P/B Ratio (as of 17 May) | 1.74 |
Management Fees (Annual) | 0.65% |
Top 10 Holdings
(as of 20 May 2024)
(Source: Bloomberg)
Fund Name (Ticker) | iShares Silver Trust (SLV US) |
Description | The iShares® Silver Trust (the ‘Trust’) seeks to reflect generally the performance of the price of silver. |
Asset Class | Commodity |
30-Day Average Volume (as of 20 May) | 35,862,656 |
Net Assets of Fund (as of 20 May) | $13,421,515,337 |
12-Month Trailing Yield (as of 14 May) | 32.57% |
P/E Ratio | NA |
P/B Ratio | NA |
Management Fees (Annual) | 0.50% |
(Source: Bloomberg)
