The Global X Silver Miners ETF (NYSEMKT: SIL) has outperformed spot silver ETFs this year, despite a volatile market. The iShares Silver Trust (NYSEMKT: SLV) is down 27%, while the Global X Silver Miners ETF has lost just 7.3% year-to-date. Some market observers believe silver miners can continue to outpace ETFs linked to silver prices, even as higher interest rates make gold and bullion-backed ETFs less appealing.
Silver's struggles this year are compounded by its tendency to overshoot gold moves. The Global X Silver Miners ETF, the largest silver miners ETF, holds a relative advantage due to its exposure to companies that don't necessarily need to hedge big moves in silver prices to boost earnings. With inflation still high and potential government spending on the horizon, the Federal Reserve may not cut interest rates soon, which could continue to weigh on spot silver prices.
Silver miners are in fundamentally sturdy positions, with high margins and declining leverage. Silver supply constraints could position dedicated silver miners to rally if prices rebound. Some banks are forecasting a silver rebound in 2027, which could benefit both the iShares and Global X ETFs. However, investors should consider that silver is an economically sensitive commodity, and recent weakness in prices may signal a cooling economy.