It was a headline designed for shock value. The title screamed, Investors Dumping SLV at Fastest Pace in 6 Years!
The headline came from Bloomberg, the epitome of “mainstream” news in my opinion. The article reported that investors were “dumping” holdings in SLV, the largest silver exchange-traded fund. They claimed the silver market had been “hit by a gale force, spurring an exit from ETFs backed by the metal.”
As you might guess, we do a lot of reading around here. And this was the first I’d heard of a “mass exodus” from SLV. Did I somehow miss this development?
It’s important, because if holdings in SLV were really cratering, it might be a sign that the market—or at least these types of investors—had changed their mind about silver. You might know that holdings in silver-backed ETFs have been stubbornly high for years, refusing to bow to any price pressures. During the crash of 2008, for example, holdings rose sharply in spite of the price falling off a cliff. Same thing happened in 2013 when the price cratered… holdings never really declined all that much, in spite of GLD shares dropping hard.
Given that, you might understand why I perked up upon seeing their chart.
Looks ominous. I needed to check it out…
Fun with Facts
The above chart is correct. There have been outflows from SLV.
But the message the journalists portray is incorrect. We went directly to the SLV site and created a chart of the fund’s holdings. I expected to see a big drop over the past few months. Instead I saw this.