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While many Americans may anticipate Election Day as the end of a barrage of political commercials, mail, and text messages, US businesses may view it as the day when policy uncertainty is finally resolved.

According to a recent Chief Financial Officer survey, as many as 30% of US businesses have taken steps to postpone, scale down, or cancel investing in their companies ahead of the US presidential election on November 5.1 The best economic outcome of the election may be that it is over, and companies can return to business planning based on whichever policy environment exists for the next four years.

However, US businesses may not be the only ones increasing activity in the near future as China's stimulus efforts have been ramping up recently.

China’s bold rate cuts

China's Loan Prime Rate (LPR) was cut on October 21 by 25 basis points (bps), taking the 1-year rate down to 3.10% after it had been 3.85% as recently as 2022.2 Policymakers also reduced the 5-year rate, now at 3.60%, down from 4.65% in 2022.3 This 75 bps and 105 bps cut outweighs the US Federal Reserve (Fed) 50 bps cut last month.4 The LPR serves as a vital policy tool as the 1-year rate determines corporate borrowing rates, and the 5-year rate influences mortgage rates. Lowering mortgage rates could result in annual savings of 150 billion yuan for 50 million households.5

China's required reserve ratio (RRR) has also been reduced recently.6,7 A drop in the RRR frees up bank capital for loans and economic expansion. The current RRR is 9.5% – having been 12.5% in mid-2021 – and authorities have suggested it could be cut again by year-end.

Betting on property recovery

On October 17, China announced fresh measures to boost lending for stalled property projects worth $560 billion as part of a whitelist program to ensure unfinished homes are delivered to buyers.8 It is important to note that in China, mortgage payments begin before newly constructed homes are finished, so any partially completed homes weigh on consumer finances. Separately, the Chinese government is set to target the renovation of one million houses in urban villages.

In addition to these recent policies designed to increase economic activity, prior incremental stimulus efforts are already showing up in financial data as some of the recent economic activity out of China has surprised to the upside. Q3 gross domestic product figures came in better than expected.9 September industrial production also exceeded expectations at +5.4% vs. 4.6% expected and 4.5% in the prior period.10 Retail sales also surprised at +3.2% vs. 2.5% expected and 2.1% prior.11

Rising metal demand

In China, meaningful support of the property market, lower financing rates, and a pickup in activity levels may support industrial demand for metals such as copper and silver. China ranks high in importance for metals as it accounts for over half of copper demand and is the largest consumer of silver globally at over 18%.12,13

Suppliers may have difficulty keeping up with demand increases in the short term. S&P Global Research recently produced a report highlighting the difficulty in bringing new mine supplies to market. The report notes the average mine takes 29 years to develop in the US – the second longest of any country in the world. However, even the shortest-to-develop countries like Ghana, the Democratic Republic of the Congo, and Laos still average 10 to 15 years.14 Such long response times remove the ability for significant production increases in the short term as a metal's price rises.

The Swiss Army knife of metals

With over 10,000 end uses, and often referred to as the utility metal, our focus remains on silver. Twenty-five years ago, silver demand was driven by 35mm film development, the photographic printing industry, and even musical instruments. Today, the focus is on the electronics and tech industries, which make up 37% of demand. Solar panels also account for 16% of the demand. These are the primary areas of demand growth as witnessed last year, with electronics demand for silver having risen 20% and solar panel demand for silver having risen 46%.15

Silver prices recently rose above $32 an ounce, marking the year-to-date highs. However, silver remained 32% below the all-time high of $47.90 on April 29, 2011, which starkly contrasts with gold, which has hit numerous all-time highs this year.16

Why selectivity matters

As with all investment ideas, maximizing returns does not stop at choosing an advantageous investment theme; investors must also select the most advantageous investment vehicle to express that theme.

Recently, there have been viral stories about two major membership-based, big-box warehouse stores selling precious metal bars and coins, including gold, silver, platinum, and palladium. More than a few customers have purchased these bars at least partially for the 2% cash back offers on their credit cards. Caution is due as physical metal bars of that small size can incur prohibitive transaction fees. These may include pawn shop fees to ensure a typical 38–50% margin or local gold dealer fees of 2% to 20%.17 Physical metal exchange-traded funds typically have fees expressed in basis points or hundredths of one percent.18,19

Final thoughts

Removing some policy uncertainty inside the US may take local businesses off the sidelines and back into the game. Internationally, after years of disappointing China stimulus efforts, we may have finally seen a more decisive package of policies to expand economic activity with positive implications for silver.

1 "More Firms Are Delaying Investment Plans Ahead of US Election." Bloomberg, September 2024. https://www.bloomberg.com/news/articles/2024-09-25/more-firms-are-delaying-investment-plans-ahead-of-us-election.
2 Loan Primary Rate is a reference rate for loans in China based off the official policy rate of medium-term loans set by the central bank of China.
3 "China cuts key lending rates again to boost economy." Nikkei Asia, October 2024. https://asia.nikkei.com/Economy/China-cuts-key-lending-rates-again-to-boost-economy.
4 The Federal Reserve is the central bank of the United States.
5 "China to cut mortgage rates for existing home loans." The State Council. The People's Republic of China, September 2024. https://english.www.gov.cn/news/202409/24/content_WS66f21f44c6d0868f4e8eb31e.htm.
6 Required reserve ratio (RRR) is the percentage of bank deposits that a bank must keep on deposit and not loan out to other customers. The ratio is set by the central bank.
7 “China cuts reserve requirement ratio by 0.5 percentage points.” The State Council. The People's Republic of China, September 2024.  https://english.www.gov.cn/news/202409/27/content_WS66f61594c6d0868f4e8eb50e.html.
8 "China to boost financing for approved housing projects to $560 billion to counter property slump." ABC News, October 2024. https://abcnews.go.com/Business/wireStory/china-boost-financing-approved-housing-projects-560-billion.
9 "China stocks move up on GDP growth surprise as US stocks flirt with record highs." Fortune, October 2024. https://fortune.com/2024/10/18/stocks-today-china-dow-sp500/.
10 "China September industrial output rises 5.4%, beating expectations." Reuters, October 2024. https://www.reuters.com/world/china/china-september-industrial-output-rises-54-beating-expectations-2024-10-18/.
11 "China reports better-than-expected retail sales and industrial production data." CNBC, October 2024. https://www.cnbc.com/2024/10/18/china-retail-sales-urban-investment-september.html.
12 "Exuberant iron ore, subdued copper show different sides of China stimulus: Russell." Reuters, October 2024. https://www.reuters.com/markets/commodities/exuberant-iron-ore-subdued-copper-show-different-sides-china-stimulus-russell-2024-10-02/.
13 "China to Continue Driving Global Silver Market Forward." The Silver Institute, September 2024.  https://www.silverinstitute.org/china-continue-driving-global-silver-market-forward/.
14 "United States Ranks Next to Last in Development Time for New Mines that Produce Critical Minerals for Energy Transition, S&P Global Finds." S&P Global, July 2024. https://press.spglobal.com/2024-07-18-United-States-Ranks-Next-to-Last-in-Development-Time-for-New-Mines-that-Produce-Critical-Minerals-for-Energy-Transition,-S-P-Global-Finds.
15 "Silver demand." World Silver Survey 2024. The Silver Institute, April 2024. https://www.silverinstitute.org/silver-demand-3/.
16 Bloomberg data: Silver price 1/1/2008–10/19/2024; Gold price 9/30/1971–10/19/2024.
17 "From Hot Dogs to Gold Bars: Costco's Latest Offering Is a Huge Hit." Money, April 2024. https://money.com/costco-is-selling-out-of-gold/.
18 Exchange-traded funds (ETFs) are baskets of securities that trade on an exchange like a stock. ETFs provide diversification, which is one of the most important concepts of sound investing.
19 "Understanding the importance of Basis Point Value." Understanding STIR Futures. CME Group. https://www.cmegroup.com/education/courses/understanding-stir-futures/understanding-the-importance-of-basis-point-value.html.

Important information

The statements and opinions expressed are those of the author and are as of the date of this report. All information is historical and not indicative of future results and subject to change. Reader should not assume that an investment in any securities and/or precious metals mentioned was or would be profitable in the future. This information is not a recommendation to buy or sell. Past performance does not guarantee future results.
Trading in commodities entails a substantial risk of loss and is not suitable for all investors.
Diversification does not eliminate the risk of experiencing investment losses.
Prospectuses for abrdn Physical Gold Shares ETF, abrdn Physical Palladium Shares ETF, abrdn Physical Platinum Shares ETF, abrdn Physical Precious Metals Basket Shares ETF and abrdn Physical Silver Shares ETF
Projections are offered as opinion and are not reflective of potential performance.
Projections are not guaranteed, and actual events or results may differ materially.
ALPS Distributors, Inc. is the marketing agent.
There are risks associated with investing including possible loss of principal.
ALPS is not affiliated with abrdn.

ETF002259 4/30/25
AA-281024-184994-1

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Investors should carefully consider a fund’s investment objectives, risks, fees, charges, and expenses before investing any money. To obtain this and other fund information, please call 866-667-9231 to request a summary prospectus and/or prospectus, or download at www.abrdn.com/us. Please read the summary prospectus and/or prospectus carefully before investing any money.

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NOT FDIC INSURED | NO BANK GUARANTEE | MAY LOSE VALUE

For ETFs, please call 844-383-7289 or click here to access a prospectus online. Investing involves risk, including possible loss of principal. ETF shares are bought and sold at market price (not NAV) and are not individually redeemed from the Fund.

Important Risks

The abrdn Gold ETF Trust, abrdn Silver ETF Trust, abrdn Precious Metals Basket ETF Trust, abrdn Platinum ETF Trust and abrdn Palladium ETF Trust are not investment companies registered under the Investment Company Act of 1940 or a commodity pool for purposes of the Commodity Exchange Act. Shares of the Trusts are not subject to the same regulatory requirements as mutual funds. These investments are not suitable for all investors. Trusts focusing on a single commodity generally experience greater volatility.

Commodities generally are volatile and are not suitable for all investors. Trusts focusing on a single commodity generally experience greater volatility. Please refer to the prospectus for complete information regarding all risks associated with the Trusts. Shares in the Trusts are not FDIC insured and may lose value and have no bank guarantee.

The value of the Shares relates directly to the value of the precious metal held by the Trust and fluctuations in the price could materially adversely affect investment in the Shares. Several factors may affect the price of precious metals, including:

A change in economic conditions, such as a recession, can adversely affect the price of the precious metal held by the Trust. Some metals are used in a wide range of industrial applications, and an economic downturn could have a negative impact on its demand and, consequently, its price and the price of the Shares;

Investors’ expectations with respect to the rate of inflation;

Currency exchange rates;

Interest rates;

Investment and trading activities of hedge funds and commodity funds; and

Global or regional political, economic or financial events and situations. Should there be an increase in the level of hedge activity of the precious metal held by the trust or producing companies, it could cause a decline in world precious metal prices, adversely affecting the price of the Shares. Should there be an increase in the level of hedge activity of the precious metal held by the Trusts or producing companies, it could cause a decline in world precious metal prices, adversely affecting the price of the shares.

Also, should the speculative community take a negative view towards the precious metal held by the Trusts, it could cause a decline in prices, negatively impacting the price of the shares. There is a risk that part or all of the Trusts’ physical precious metal could be lost, damaged or stolen. Failure by the Custodian or Sub-Custodian to exercise due care in the safekeeping of the precious metal held by the Trusts could result in a loss to the Trusts.

The Trusts will not insure its precious metals and shareholders cannot be assured that the custodian will maintain adequate insurance or any insurance with respect to the precious metals held by the custodian on behalf of the Trust. Consequently, a loss may be suffered with respect to the Trust’s precious metal that is not covered by insurance.

Commodities generally are volatile and are not suitable for all investors.

Investors buy and sell shares on a secondary market (i.e., not directly from Trusts). Only market makers or "authorized participants" may trade directly with the Trusts, typically in blocks of 25k to 100k shares.

Commodities generally are volatile and are not suitable for all investors. This material must be accompanied or preceded by the prospectus. Carefully consider each Trust’s investment objectives, risk factors, and fees and expenses before investing. Please click here to review the prospectus.

ALPS Distributors, Inc. is the marketing agent for the abrdn Gold ETF Trust, abrdn Silver ETF Trust, abrdn Precious Metals Basket ETF Trust, abrdn Platinum ETF Trust and abrdn Palladium ETF Trust.

ALPS Distributors, Inc. is the distributor for abrdn ETFs.

ALPS Distributors, Inc. is not affiliated with the companies of abrdn.

'40 Act Fund Disclosure:

An investor should consider the investment objectives, risks, charges and expenses of the ETFs carefully before investing. To obtain a prospectus containing this and other important information, call 1-844-383-7289 or visit www.abrdn.com/us/etf. Read the prospectus carefully before investing.

Fund Risk: There are risks associated with investing including possible loss of principal. Commodities generally are volatile and are not suitable for all investors. There can be no assurance that the Fund’s investment objective will be met at any time. The commodities markets and the prices of various commodities may fluctuate widely based on a variety of factors. Because the Fund's performance is linked to the performance of highly volatile commodities, investors should consider purchasing shares of the Fund only as part of an overall diversified portfolio and should be willing to assume the risks of potentially significant fluctuations in the value of the Fund. Actively managed ETFs do not necessarily seek to replicate the performance of a specified index. Actively managed ETFs are subject to risks similar to stocks, including those related to short selling and margin maintenance. The Fund’s return may not match the return of the index.

Through holding of futures, options and options on futures contracts, the Fund may be exposed to (i) losses from margin deposits in the case of bankruptcy of the relevant broker, and (ii) a risk that the relevant position cannot be close out when required at its fundamental value. In pursuing its investment strategy, particularly when rolling futures contracts, the Fund may engage in frequent trading of its portfolio of securities, resulting in a high portfolio turnover rate.
As a "non-diversified" fund, the Fund may hold a smaller number of portfolio securities than many other funds. To the extent the Fund invests in a relatively small number of issuers, a decline in the market value of a particular security held by the Fund may affect its value more than if it invested in a larger number of issuers. The value of Shares may be more volatile than the values of shares of more diversified funds.

During situations where the cost of any futures contracts for delivery on dates further in the future is higher than those for delivery closer in time, the value of the Fund holding such contracts will decrease over time unless the spot price of that contract increases by the same rate as the rate of the variation in the price of the futures contract. The rate of variation could be quite significant and last for an indeterminate period of time, reducing the value of the Fund.

Changes in the laws of the United States and/or the Cayman Islands, under which the Fund and the Subsidiary are organized, respectively, could result in the inability of the Subsidiary to operate as intended and could negatively affect the Fund and its shareholders.

To the extent the Fund is exposed directly or indirectly to leverage (through investments in commodities futures contracts) the value of that Fund may be more volatile than if no leverage were present.

In order to qualify for the favorable U.S. federal income tax treatment accorded to a regulated investment company ("RIC"), the Fund must derive at least 90% of its gross income in each taxable year from certain categories of income ("qualifying income") and must satisfy certain asset diversification requirements. Certain of the Fund’s investments will not generate income that is qualifying income. The Fund intends to hold such commodity-related investments indirectly, through the Subsidiary. The Fund believes that income from the Subsidiary will be qualifying income because it expects that the Subsidiary will make annual distributions of its earnings and profits. [However, there can be no certainty in this regard, as the Fund has not sought or received an opinion of counsel confirming that the Subsidiary’s operations and resulting distributions would produce qualifying income for the Fund.] If the Fund were to fail to meet the qualifying income test or asset diversification requirements and fail to qualify as a RIC, it would be taxed in the same manner as an ordinary corporation, and distributions to its shareholders would not be deductible by the Fund in computing its taxable income. Investors buy and sell shares on a secondary market (i.e., not directly from the Trust). Only market makers or authorized participants may trade directly with the funds, typically in blocks of 25K to 100K shares.

The abrdn Bloomberg Industrial Metals K-1 Free ETF is new and has limited operating history.

“Bloomberg®” and “Bloomberg Commodity Index Total ReturnSM,” “Bloomberg Commodity Index 3 Month ForwardSM” and “Bloomberg Industrial Metals Subindex Total ReturnSM” are service marks of Bloomberg Finance L.P. and its affiliates, including Bloomberg Index Services Limited (“BISL”), the administrator of the indices (collectively, “Bloomberg”) and have been licensed for use for certain purposes by abrdn ETFs Advisors LLC. Bloomberg is not affiliated with abrdn ETFs Advisors LLC, and Bloomberg does not approve, endorse, review, or recommend abrdn Bloomberg All Commodity Strategy K-1 Free ETF (BCI), abrdn Bloomberg All Commodity Longer Dated Strategy K-1 Free ETF (BCD), and abrdn Bloomberg Industrial Metals K-1 Free ETF (BCIM). Bloomberg does not guarantee the timeliness, accurateness, or completeness of any data or information relating to Bloomberg Commodity Index Total Return, Bloomberg Commodity Index 3 Month Forward” and “Bloomberg Industrial Metals Subindex Total Return".

Please see the current prospectus, www.abrdn.com/us/etf for more information regarding the risk associated with an investment in the Funds.

S&P 500: The S&P 500 Index is the Standard & Poor’s composite index of 500 stocks, a widely recognized, unmanaged index of common stock prices.

Standard Deviation: Standard deviation is a statistical measure of the extent to which returns of an asset vary from its average.

Bloomberg Commodity Index: The Bloomberg Commodity Index (BCOM) is a broadly diversified commodity price index distributed by Bloomberg Indexes.

Discount- A situation when the share price of a fund trades below its net asset value.

Premium- A situation when the share price of a fund trades above its net asset value.

The Bloomberg Barclays US Aggregate Bond Index is a broad-based flagship benchmark that measures the investment grade, US dollar-denominated, fixed-rate taxable bond market.

Annualized Volatility is a statistical measure of the dispersion of returns for a given security or market index

Beta is a measure of the volatility, or systematic risk, of an individual stock in comparison to the unsystematic risk of the entire market

Sharpe ratio is the average return earned in excess of the risk-free rate per unit of volatility or total risk
NAV or Net Asset Value represents the per share/unit price of the fund on a specific date or time.

All material presented is compiled from sources believed to be reliable and current, but accuracy cannot be guaranteed. This is not to be construed as an offer to buy or sell any financial instruments. It is not our intention to state, indicate or imply in any manner that current or past results are indicative of future profitability or expectations. As with all investments there are associated inherent risks. Please obtain and review all financial material carefully before investing.

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Persons residing outside the United States are invited to visit our global website for more information about products and services available to non-U.S. investors.

Alternative investments involve specific risks that may be greater than those associated with traditional investments; are not suitable for all clients; and intended for experienced and sophisticated investors who meet specific suitability requirements and are willing to bear the high economic risks of the investment. Investments of this type may engage in speculative investment practices; carry additional risk of loss, including possibility of partial or total loss of invested capital, due to the nature and volatility of the underlying investments; and are generally considered to be illiquid due to restrictive repurchase procedures. These investments may also involve different regulatory and reporting requirements, complex tax structures, and delays in distributing important tax information.

Diversification does not ensure a profit or protect against a loss in a declining market.

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