Silver’s YTD gain beats gold, silver and S&P 500 index but investors mostly yawn

Most-active gold futures dipped below $2,300/oz on Wednesday to the lowest finish in more than seven weeks, weighed by a stronger dollar and higher bond yields, while traders await U.S. inflation data due later this week.

The dollar rose 0.4% to nearly a two-month peak against rivals, making gold more expensive for other currency holders, while the U.S. 10-year Treasury yield added eight basis points to 4.32%, ending near a two-week high.

This week’s key data point will be the U.S. Personal Consumption Expenditures price index, the Federal Reserve’s preferred inflation gauge which could factor in the central bank’s monetary policy path amid recent signs of resilience in the economy.

“It seems that gold has settled into a typical summertime trading range after a very hectic and impressive spring rally,” Gold Newsletter editor Brian Lundin told Marketwatch, adding that the odds favor a continuation of the range for the next 1-2 months, until Fed rate cuts come into view in the early fall.

On its expiration day, the front-month June Comex gold contract (XAUUSD:CUR) closed -0.7% to $2,299.20/oz, while the most-active August contract ended -0.8% to $2,313.20/oz, the lowest settlement for the most-active contract since May 3.

Front-month Comex silver (XAGUSD:CUR) for June delivery settled +0.2% to $28.909/oz, while most-active September Comex silver (XAGUSD:CUR) finished +0.2% to $29.26/oz.

ETFs: (GLD), (GDX), (GDXJ), (IAU), (NUGT), (PHYS), (GLDM), (AAAU), (SGOL), (BAR), (OUNZ), (NYSEARCA:SLV), (PSLV), (SIVR), (SIL), (SILJ)

Silver’s 21% gain this year is beating gold and silver, not to mention the S&P 500 index, but many investors seem to be shunning the metal, as most silver bullion and silver mining ETFs have net outflows YTD, according to Morningstar data, while U.S. Mint silver bullion coin sales are less than half of 2023’s sales of 3.4M oz through June.

The Silver Institute says industrial demand for the metal in 2023 reached a record, helped by a 64% jump in demand from the solar panel industry, and the group expects usage will rise another 20% this year.

Options to own silver are much more limited than gold; aside from physical bars and coins, only a few ETFs are available – the biggest silver-backed ETF is the $13.2B iShares Silver Trust (SLV).

Also, there are no pure-play silver mining stocks, since most silver is dug up as a byproduct of base metal or gold production.