Silver Prices May Be Due for a Bounce, Could Lift USLV ETF

The iShares Silver Trust (SLV), which tracks physical silver holdings, has plummeted 38% over the past six months. The decline is significant, and some investors are starting to see signs of life in the precious metal. If silver can rally convincingly, one ETF that could shine is the Direxion Daily Silver Bull 2X ETF (USLV).

USLV attempts to deliver twice the daily returns of spot silver prices using SLV as a reference tool. While this means it's not for the faint of heart and should be held over short timeframes, USLV could see gains if silver breaks through resistance areas.

The war in Iran has been weighing on silver prices, with gold also failing to live up to its safe-haven reputation during the conflict. The dollar's firming response to the war has also made it harder for dollar-denominated silver. However, some analysts believe that a convincing advance would require stronger follow-through above recent resistance and signs that buyers are prepared to hold positions through heightened volatility.

One reason to be optimistic about silver is its supply and demand dynamics. The Silver Institute forecasts a silver shortage of approximately 67 million ounces in 2026, which could provide medium- to long-term support for silver prices.