Assets in iShares Silver Trust, the biggest exchange-traded fund for the metal, climbed the most in five years as more investors are seeking an alternative to gold.
Holdings jumped 572 metric tons, or 5.9%, the biggest increase since December 2007, according to data on the iShares website today. BlackRock Inc., the manager of the fund, confirmed the figures. The metal worth $579 million boosted assets to 10,735 tons, the most since May last year.
Global investment through all silver-backed exchange-traded products is a record 19,114 tons, or about nine months of mine output, according to data compiled by Bloomberg and Barclays Plc. Steps by policy makers from the U.S. to China and Europe to boost economies attracted investors to precious metals on bets that stimulus will stoke inflation.
“Some investors see poor man’s gold as a cheaper alternative to the yellow metal and are allocating to it,” Mark O’Byrne, executive director of Dublin-based GoldCore Ltd., a brokerage that sells and stores bullion coins and bars, said by e-mail today. “Allocations to silver remain very small which suggests that the holdings could go higher resulting in higher silver prices again in 2013.”
Silver will rise as much as 28% to $40.25 an ounce this year, based on the median of 49 analyst, trader and investor estimates compiled by Bloomberg in December. The metal for immediate delivery was at $31.3325 an ounce today in London.
Silver almost tripled since the end of 2008, and is up 2.9% this year compared with a 0.2% decline in gold and 9.4% jump in platinum.