The silver price rallied 17 percent during the first four months of 2017, but has fallen 12 percent in the past three months.

In contrast, assets in ETFs backed by silver have risen 6.6 percent since April 24 to reach a record 21,211 tons.George Coles, an analyst at Metals Focus, told Bloombergthat the divergence is being driven by different typesof investors.

Large, active hedge funds have been shortingCOMEXfutures on the risk of rising US interest rates, pushingsilver lower. Meanwhile, smaller traders looking to diversify their portfolios have jumped into silver ETFs. He believes those smaller traders may berewarded as slower US economic growth boosts demand for safe-haven assets.

Indeed, in a recent Bloomberg survey of 13 traders and analysts, the majority said they are bullish on silver, with11 predicting price gains and twopredicting declines. The median 12-month forecast given among the sevenrespondents that gavean estimate was $20 per ounce; that would be a 24-percent rally from the current price level.

Otheranalystsare also bullish on silver. Johann Wiebe of Thomson Reuters GFMS predicts that silver will reach an average of $17 in Q3 and approximately $18 in Q4. Looking ahead to 2019, Wiebe is more optimistic, and anticipates that silver will trade above $19.

Capital Economics recently released a more modest prediction of $15 by the end of 2017, with a recovery to about $16 by the end of 2018.The precious metal was trading at $16.30 as of 1:24 p.m. PST on Thursday (July 20).

Further interest rate hikes from the US Federal Reserve will be key to watch as the year continues. While expectations of further hikes have been running high,Fed ChairJanet Yellen‘s speech to Congress earlier in July left some market watchers wondering if increaseswill actually happen. If rates areleft unchanged that would bode well for silver, which tends to do better when rates are low.

Interestingly, during Yellen’sspeech an unknown man held up a sign that read Buy Bitcoin. He was later removed from the hearing room, but bitcoin was trading 3.7 percent higher afterthe event. There is some debate about whether bitcoin will become a substitute for gold or cannibalizepart of the gold market; silver has been largely left on the sidelines of these discussions.

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Securities Disclosure: I, Melissa Shaw, hold no direct investment interest in any company mentioned in this article.

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