Thursday 28 October 2010

How can I invest in Silver?

Question
Can you suggest me a a couple of Silver ETFs than I can purchase from London broker?Answer
The only silver exchange traded funds (ETFs) traded on the London Stock Exchange that I know of are the range from ETF Securities.

They offer 4 fund that might be of interest:

ETFS Physical Silver - available in either dollars or sterling, the fund aims to track the silver spot price, i.e. similar to holding actual silver.

ETFS Silver - traded in dollars and aims to track the Dow Jones-UBS Silver Sub Index. This means the fund effectively tracks the price of silver based on rolling futures contracts.

ETFS Leveraged Silver - as per the above fund but aims to deliver twice the return. Great if the price rises, but will double your losses if the price falls.

ETFS Short Silver - as per the silver fund but aims to deliver the opposite return to the index, i.e. you'll make money if the silver price falls.

However, I'd be wary about piling too heavily into silver at the moment. Price performance has been strong this year and it appears China may have less silver to export due to growing domestic demand, good for the silver price. But if global growth slows then industrial demand (the biggest single source of demand for silver) may drop, hurting the price. And there are also fears that speculative demand has pushed the silver price artificially high, but then the same could be said for gold too and its price remains robust, for now at least.

Read this Q and A at http://www.candidmoney.com/questions/question307.aspx

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