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Silver Slaughtered: Time to Buy?

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With silver on the downtrend right now, a strong buying opportunity may soon present itself as the beaten-down metal is still well off its historical highs.

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Just a short time ago, silver had been surging relatively under the radar. Its strong gains were outshined by gold, despite the white metal performing better than its more popular counterpart. But recent weeks have seen some weakness restored to the silver market, as October is notoriously weak for precious metals. Since peaking in early October, silver has dropped by nearly 7.4%, marking hefty losses for just a handful of trading sessions.

Silver has long been more volatile than its gold counterpart, but that has attracted a wealth of investors who have seen the metal outdo gold on a number of occasions. This year alone, the commodity is up over 17%, compared to gold's 11%. In 2009 and 2010 the precious metal surged by 47% and 82% respectively, dwarfing the returns of gold. But for every time that silver's gains have surpassed those of gold, this metal has also turned in steep losses due to its hefty volatility.

With silver on the downtrend right now, a strong buying opportunity may soon present itself as the beaten-down metal is still well off its historical highs. Recently, the metal was touted by the likes of Jim Rogers, who called it a better buy than gold, believing that its upside potential is quite handsome. For those looking to buy into silver's dip, we outline several options to help you gain exposure to this commodity.
  • iShares Silver Trust (NYSEARCA:SLV): By far the most popular option, this physically-backed fund fund has more than $10 billion in assets and trades over 12 million times each day.
  • Silver Miners ETF (NYSEARCA:SIL): This ETF invests in companies that have their hands in the silver mining industry. Note that as a mining fund, SIL will be a bit more volatile than the actual metal itself and does not always correlate to the metals daily movements.
  • UltraShort Silver Fund (NYSEARCA:ZSL): Of course, some of you may feel that this metal still has a ways to fall before it turns bullish again. This ETF invests in silver futures contracts with a -200% leverage to help you live out your bearish silver sentiment.
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Editor's note: This article by Jared Cummans was originally published on Commodity HQ.
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No positions in stocks mentioned.
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