Checking In: Don't Forget This Precious Metals Play

Everyone and his sister is enamored by precious metals, particularly gold and silver. That's proved to be quite a boon for ETFs that are backed by physical holdings of those metals and one need look no further than the fact that the SPDR Gold Shares GLD has become the world's largest ETF by assets. Of course, there is more to the precious metals theme than just gold and the ETFs that hold the yellow metal. Investors with an appetite for risk may do well to diversify their precious metal holdings with some of gold's friends, such as silver, platinum and palladium. The ETFS Physical White Metals Basket Shares WITE represents one-stop shopping for accomplishing that objective. Simply put, WITE is precious metals without the gold. The ETF, which made its debut in December, is weighted exclusively to silver, platinum and palladium. That makes WITE, which has attracted over $70 million in assets under management, a compelling bet on two fronts. First, gold's rising tide is showing that can lift the sails of other precious metals. Investors seeking out cheaper alternatives to gold are embracing silver and to a lesser extent, palladium. Second, and we'll admit this may be hard to fathom in this environment, but should the global economy avoid a double-dip recession and rebound, WITE's exposure to precious metals with abundant industrial uses will serve the ETF well. WITE's breakdown is as follows: Nearly 50,000 ounces of silver, almost 500 ounces of platinum and almost 400 ounces of platinum. Silver can and should be viewed as the primary driver of WITE's price action and at the end of the day, WITE can be viewed as silver ETF with a platinum and palladium kicker. That's a noteworthy concept for the investor looking for a little something more beyond gold and silver. While WITE has been outperformed by the ETFS Physical Silver Shares SIVR, ETF Securites' rival to the iShares Silver Trust SLV, in the past three months, the silver component has allowed WITE to sharply outperform the ETFS Physical Palladium Shares PALL and the ETFS Physical Platinum Shares PPLT over the same time frame. Bottom line: If WITE retreats to support just below $65 and that support holds, that would be a valid entry point because if spot silver makes a move to $50 and beyond, WITE probably heads to the high 70s.