SLV ETF inflows surge as silver price rally accelerates

The iShares Silver Trust (SLV) had its best week this year as the year-to-date inflows jumped to a record high and its price surged to a 13-year high. The ETF jumped to $33, up by 25% from its lowest point this year. 

SLV ETF inflows are soaring

The SLV ETF, which tracks silver, has done well this year as its inflows jumped. Data shows that the weekly inflows rose by $451 million last week, a big increase from $92 million a week earlier. 

The fund has had total inflows of over $458 million this year, bringing its total assets to over $17 billion, making it the biggest silver-focused ETF in the world.

SLV ETF assets jumped as investors sought to take advantage of the ongoing silver price rally that has pushed it to the highest point in over 13 years. 

Silver has jumped for a few reasons. First, it surged because of the recent gold price surge to a record high. Gold peaked to almost $3,500 this year as demand for safe havens rose. Silver is often seen as a cheaper alternative to gold, because it is a popular precious metal.

Second, silver price surged because of the view that it was highly undervalued compared to gold. The closely-watched gold/silver ratio peaked at $106 as gold price surged to a record high. Things have turned around now, and the ratio has dropped to $92, its lowest level since April 1. 

Third, silver has jumped because of the rising industrial demand. Recent data showed that the manufacturing PMI in most countries improved in May, ending the recent tariff-induced plunge. 

The next key catalyst for silver price will be the US inflation data, which will come out on Wednesday. Analysts believe that inflation rose slightly in May as the impact of tariffs emerged. 

Silver reacts to US inflation data because of its impact on the Federal Reserve. In most cases, silver does well when the Fed is cutting interest rates or when it is about to cut.

SLV ETF technical analysis

The daily chart shows that the SLV ETF has been in a strong bull run in the past few months. It recently crossed the important resistance level at $31.75, the highest level in November and April this year. 

Silver has remained above the 50-day and 100-day Exponential Moving Averages (EMA), a sign that bulls are in control. The Relative Strength Index (RSI) has moved closer to the overbought level at 70. The MACD indicator has also continued rising.

Therefore, silver price will likely continue soaring as bulls target the next key resistance level at $40. The alternative scenario is where the fund retreats and retests the support at $31.75.