Those Stubborn Silver Investors

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...Through April 30, silver's year-to-date gain was much more robust than gold's: 10.3% versus 0.7%. SLV's share base grew 23.4% as a result. And, from the top of silver's price trend at $20.92, from which a 16.3% decline ensued, the number of SLV shares actually grew 4.2%...

Gold and silver are both precious metals and therefore ought to move in sync with one another, right?

Granted, silver has broader industrial applications, but it's always been the "poor man's gold." Some traders, however, are looking at the amount of metal covering the iShares gold and silver trusts and thinking, "Hmmm ... that's odd."

Why is it, these traders wonder, that the amount of gold backing the iShares COMEX Gold Trust (AMEX: IAU) has been declining, but the vault stores of metal for the iShares Silver Trust (AMEX: SLV) have held steady?

The amount of metal in the iShares depositories are directly correlated to the number of trust shares outstanding.

Through the end of April, gold's year-to-date spot price appreciation was 0.7%. Over that time, IAU's share float rose 13.9%. Within that trend, however, was a much more dramatic subtext. Since gold's March 18 peak at $1,003-a 10.5% decline through April 30-IAU's share base shrank 3.8%.

Meanwhile, over at SLV, things looked a little different. First of all, there was the price of silver itself. Through April 30, silver's year-to-date gain was much more robust than gold's: 10.3% versus 0.7%. SLV's share base grew 23.4% as a result. And, from the top of silver's price trend at $20.92, from which a 16.3% decline ensued, the number of SLV shares actually grew 4.2%...

The differential in price movements explains a lot of the disparity. Investment demand takes up the vast majority of the iShares trust supply. Gold's headlong plunge under water made IAU a lot less attractive as a hedge for investors. Silver investors, on the other hand, hadn't dipped below the water line. Most treaded water, hoping for a rising tide...

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