Retail investors drive silver into most crowded commodity trade – pile into ETFs

Summary:

• Retail investors have made silver the most crowded commodity trade, Reuters reports

• Nearly $922m flowed into silver ETFs over the past 30 days, led by iShares Silver Trust

• Silver prices have surged above $90/oz, setting multiple record highs

• Silver mining equities have also soared, with related indices up over 200% y/y

• Some strategists warn the pace of gains raises risks of volatility

Retail investors have piled into silver at an unprecedented pace, turning the metal into the most crowded commodity trade in global markets, according to a report cited by Reuters (may be gated).

Data from Vanda Research show that individual investors have poured nearly $922 million into silver-backed exchange-traded funds over the past 30 days alone. Much of that flow has been directed into products such as the iShares Silver Trust, which has seen a sharp acceleration in retail demand.

On Wednesday, the iShares Silver Trust recorded $69.2 million in retail inflows, marking its second-largest single day of buying on record, trailing only the surge seen during the 2021 retail-driven silver rally. The ETF is up more than 31% year-to-date and has gained over 210% in the past 12 months, reflecting a dramatic upswing in investor enthusiasm.

Silver prices themselves have climbed rapidly, setting a series of fresh highs. Spot silver was trading around $91.90 an ounce late on Thursday, up sharply from roughly $72.60 at the start of the year. Prices briefly surged above $93 an ounce earlier in the week, according to LSEG data, underscoring the speed and intensity of the rally.

Equities tied to the metal have also surged. The MSCI ACWI Select Silver Miners Investable Index, which tracks mining companies with strong exposure to silver prices, has jumped roughly 225% over the past year, amplifying gains seen in the physical market.

While comparisons have been drawn to the 2021 “silver squeeze” that coincided with meme-stock speculation in names such as GameStop and AMC Entertainment, Vanda argues the current rally rests on firmer foundations. The firm says the scale and persistence of retail accumulation suggest silver is increasingly being treated as a core macro asset rather than a purely speculative trade.

Still, some market participants are cautious. Kathy Kriskey, head of alternatives ETF strategy at Invesco, warned that the speed of the move is striking, noting that silver took decades to break above $50 an ounce before racing past $80 in just a few months.