ETF Investors Bail on iShares Silver as Metal Price Tumbles

(Bloomberg) -- The headwinds that capped gold’s rally this year have hit silver with gale force, spurring an exit from exchange-traded funds backed by the metal.

Silver has tumbled about 7 percent since trading at a four-month high in September as precious metals lose favor amid the record-breaking rally in U.S. equity indexes. Solid earnings reports from companies including Caterpillar Inc. are fueling optimism about global growth, bolstering the case for the Federal Reserve to keep raising borrowing costs and hurting the investment appeal of non-interest-bearing assets including gold and silver.

Investors pulled $362 million from iShares Silver Trust this year, setting it on course for the biggest redemption in six years. The exit has shrank holdings in the world’s largest ETF backed by the metal to the least since March 2016. IShares owns about half of the total silver holdings in all silver-backed ETFs tracked by Bloomberg.

To contact the reporter on this story: Luzi Ann Javier in New York at ljavier@bloomberg.net.

To contact the editors responsible for this story: James Attwood at jattwood3@bloomberg.net, Joe Richter, Debarati Roy

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