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

Retail investors have increasingly turned to silver, making it one of the most crowded commodity trades. According to a Reuters report, nearly $922 million has flowed into silver-backed ETFs over the past month. The iShares Silver Trust stands out as the main beneficiary of this influx, reflecting a significant uptick in demand from retail investors. The ETF is up more than 31% year-to-date and has gained over 210% in the last year. Silver prices have also surged, trading around $91.90 an ounce as of late Thursday, marking a significant increase from approximately $72.60 at the beginning of the year. Earlier in the week, prices briefly broke above $93, contributing to the rapid pace of this rally. Additionally, silver mining equities have soared, with the MSCI ACWI Select Silver Miners Investable Index jumping about 225% over the past year. This substantial growth in the mining sector amplifies gains seen in the physical silver market. Comparisons are being made to the 2021 'silver squeeze', yet Vanda Research suggests the current rally is built on firmer foundations, indicating that retail accumulation points to silver being increasingly viewed as a core macro asset rather than a speculative investment. Nonetheless, caution remains among some market participants, with Invesco's Kathy Kriskey highlighting the rapid transition of silver passing $80 after taking decades to break above $50.