Top Performing Silver ETFs For January

Silver posted modest returns in January, but February could yield some wild action.
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It looks like the Reddit army will turn its focus to silver and silver ETFs to kick off February kicking off what could be one of the precious metal's most volatile months in recent memory.

Precious metals in general, including silver and gold, drifted lower during the first half of January as investors, encouraged by the idea of more stimulus, favored equities, junk bonds and other risk assets. Safe havens, such as precious metals and Treasuries, didn't garner significant interest.

That changed during the past week as smaller retail traders determined to single-handedly bring down the big hedge funds went to work. GameStop, AMC, Bed Bath & Beyond and other most troubled retail names soared in value as shares got bid up to wild valuations. The common thread was that they all had high short interest.

The latest move into silver appears to be more of a way to stick it to the banks instead of the hedge funds. The general belief skimming through the message boards is that traders believe the banks have manipulated the price of silver for their own benefit for years and driving the price higher could potentially hurt the banks going forward.

February is likely to look much different for silver products, but, for now, let's review what happened in January.

Silver ETF Performance for January

Within the silver ETF marketplace, it was a tale of two subsectors.

Silver ETF Performance in January

Silver ETF Performance in January

ETFs targeting physical silver gained between 1-2%, while silver miner ETFs lost between 4-5%. This type of disparity isn't terribly unusual when precious metals aren't necessarily in favor. Silver miners tend to follow the direction of silver, but also behave more like stocks than anything. They also tend to be more volatile than the underlying metal.

Silver ETF Performance - January 2021

StockCharts

ETF NameTickerReturn

iShares Silver Trust

SLV

1.71%

Aberdeen Standard Physical Silver Shares ETF

SIVR

1.64%

Invesco DB Silver Fund

DBS

1.23%

Global X Silver Miners ETF

SIL

-3.95%

ETFMG Prime Junior Silver Miners ETF

SILJ

-4.67%

iShares MSCI Global Silver Miners ETF

SLVP

-4.80%

The latter half of last week, however, has been a different story as the traders on Reddit began shifting some focus away from GameStop and on to the next target.

That's looking like it could be silver. The message boards started rumbling and silver funds responded.

Silver ETF Rally

Silver ETF Rally

Most silver ETFs, whether they targeted physical silver or silver miners, gained 4-6% in the final three trading days of January. The outlier was the ETFMG Prime Junior Silver Miners ETF (listed under its former name of the PureFunds ISE Junior Silver Miners ETF in the chart above), which returned more than 8%.

Silver ETFs Are Roaring To Kick Off February

We're only about one hour into trading on Monday, February 1st as I write this, but silver ETFs are already off to the races.

Silver ETF Rally

Silver ETF Rally

Gains of about 9-13% across the board are being realized right now with silver miners leading the way. If the GameStop crowd is successful in driving the price of silver much higher (and early indications are that they are), I'd expect silver miners to continue leading the way.

Silver is a bit of a different market than stocks, such as GameStop and AMC, so I wouldn't expect 1000% gains here. Driving the price towards $40, however, doesn't seem out of the question.

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