Supply disruptions, which began during the COVID-19 outbreak, continue to cause shortages in physical silver. Rick Harrison, pawn shop owner from the reality show Pawn Stars, said the metal is very hard to come by right now because shipping is difficult.

And according to the data released by the Commodity Futures Trading Commission (CFTC), many investors reduced their net long silver positions in the futures markets.

The report said non-commercial silver futures reached a net position of 3,981 contracts in June, while commercial silver futures hit a net position of -57,682 contracts. The weekly change was 12,431 net contracts.

Obviously, this means that exchange-traded silver funds (ETFs) are more liquid than owning the precious metal.

Investors clearly prefer silver when hedging inflation, and they favor ETFs, which contain silver or silver futures, not silver mining stocks.

Hence, over the past year, silver ETFs showed very good performance in the market.