The price of silver is down from its January highs. Currently, it’s trading around $79, which is nowhere near even $100, let alone its peak of more than $121. The excitement around the precious metal has largely cooled off in recent months as the market has shown greater stability.
The iShares Silver Trust (NYSEMKT: SLV), which tracks the price of silver, has also been struggling of late. Although it’s still in positive territory for the year (it’s up around 3%), it is trading right around its 50-day moving average and is down 35% from its 52-week high.
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While silver has been trending upward in recent days, many investors may worry that it won’t return to its recent highs anytime soon, perhaps ever. But I believe another rally could still happen this year, potentially pushing the metal to new heights.
In late January, President Trump announced his pick for the new Fed chair — Kevin Warsh. That day, Jan. 30, silver crashed, seemingly because the stock market had renewed confidence in the Fed. The dollar was also up, as Warsh looked like a stable and safe pick; thus, no need for investors to load up on the precious metal for safety anymore.
However, there’s no guarantee a transition will happen smoothly. The Justice Department is investigating the current Fed chair, Jerome Powell, and if that isn’t resolved soon, it could delay Warsh’s confirmation. That may keep Powell in his position even after his term ends next month. Political turmoil could prompt investors to once again seek safe-haven assets such as silver, potentially driving its price higher.
Given recent stability in silver prices, the iShares Silver Trust may be a less risky investment to hold right now. Previously, it looked too volatile, but with much less speculation around the exchange-traded fund (ETF) these days, it can once again be an attractive option, particularly if you want to diversify your portfolio.
Plus, it could still take off this year if there is political or even economic turmoil that sends the market into a panic. The economy isn’t in great shape, and layoffs are on the rise. If nothing else, investing in the iShares Silver Trust can be a good hedge against all that potential uncertainty. In the past 12 months, the ETF has risen by more than 140%.
