Metals Mixed, But Silver Surges

Published on Friday, 20 January 2012 17:17 Written by Todd Shriber

New York, January 20^th (TradersHuddle.com) – Look at the results for enough metals ETFs, precious and industrial, today and it’s easy to come away feeling that it was a mixed bag out there. The SPDR Gold Shares (NYSE: GLD) added half a percent while the ETFS Physical Platinum Shares (NYSE: PPLT) was higher by nearly 1%. On the other hand, the ETFS Physical Palladium Shares (NYSE: PALL) was down moderately while the iPath DJ-UBS Copper TR Sub-Index ETN (NYSE: JJC) shed almost 2% on above average volume.

In terms of the daily winners, none can compete with the iShares Silver Trust (NYSE: SLV), which surged almost 5% on volume that was approximately a third above the daily average. One day does not make a trend, but a 5% jump in SLV on strong volume could prove to be a positive sign for silver bulls. In the immediate term, SLV was able to reclaim its 50-day moving average thanks to today’s move.

The same can be said of the rival ETFS Physical Silver Shares (NYSE: SIVR), which was higher by almost 5% today.

In what may be considered to be the extension of some old frustration that we addressed in our piece on mining ETFs, the Global X Silver Miners ETF (NYSE: SIL) was up "just" 1.7% today on below average volume. The chart is telling us it’s probably going to take a move above $24 to really get new buyers excited about this ETF.

The Market Vectors Gold Miners ETF (NYSE: GDX) could only muster a small gain on the day, but its small-cap cousin, the Market Vectors Junior Gold Miners ETF (NYSE: GDXJ), popped 1.7% on below average volume, but the gain was enough to get GDXJ above its 50-day line. And for those willing to take on some risk in search of yield, GDXJ has a dividend yield of 4.88%.

There’s more good news for gold. The 2012 survey of mining executives conducted by PricewaterhouseCoopers shows that a whopping 80% of those polled expect gold prices to rise this year while just 6% expect a decline. Predictions range from a low of $1,350 an ounce to a higher of $2,500 with a majority of the executives polled expecting the yellow metal to top out in the $2,000 an ounce area.

If gold sees $2,000, that would send the SPDR Gold Shares, the world’s largest ETF backed by physical gold, to the $200 area. Even if GLD "only" ran to $195 with gold at $2,000/oz., that would still represent significant upside from where the ETF currently trades. Year-to-date, GLD is up over 6%.