Retail investors steer record amount cash into silver, creating crowded trade

On Thursday, silver prices traded at $91.90 an ounce late in the afternoon, up from $72.62 on the first trading year

• Individual investors bought $921.8 million in silver ETFs in the last 30 days
• Silver prices hit $91.90 an ounce, up from $72.62 at the year's start
• Silver ETFs and mining stocks have soared over 200% in the past 12 months

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Individual investors have been snapping up silver at such a pace it has turned into the most crowded commodity trade in the market, according to a report published on Thursday by Vanda Research.

Vanda calculated that in the last 30 days alone, individual investors have snapped up $921.8 million of exchange-traded funds underpinned by silver such as the iShares Silver Trust. The iShares ETF recorded $69.2 million in retail inflows on Wednesday, marking the largest day of retail buying second only to 2021, when retail investors last drove prices skyward.

The ETF is up 31.3% so far this year and has soared 210.9% in the last 12 months. Silver has set a series of new highs. On Thursday, silver prices traded at $91.90 an ounce late in the afternoon, up from $72.62 on the first trading year, but below the record of more than $93 intraday Wednesday and Thursday, according to data from LSEG.

Meanwhile, the MSCI ACWI Select Silver Miners Investable Index, which tracks stock prices of mining companies with shares particularly exposed to changes in the price of the metal, has soared some 225% in the last 12 months.

That 2021 bull market in silver came as part of a broader retail speculative boom in meme stocks like GameStop and AMC Entertainment. But this time, Vanda says, there are more concrete reasons underpinning the rally.

"This isn't just a meme-stock spike; we are witnessing a structural accumulation that has now surpassed the heights of the 2021 'Silver Spike'," Vanda noted. That means it is time to treat silver as "a core macro trading asset" and not just a speculative bet, it added, pointing to the fact that retail investors are big players in the ProShares UltraShort Silver ETF, an inverse leveraged fund that returns double any decline in the daily price of silver.

Others remain more wary.

"We waited 45 years for silver to break above $50 an ounce and now we've seen it zoom past $80 in less than three months," said Kathy Kriskey, head of alternatives ETF strategy at Invesco.