I agree that some of the better than expected economic data is pushing silver higher. A barometer I like to use with silver is the price of base metals. This shows how the industrial component of silver is influencing the price. Ticker symbol: DBB is the most user-friendly gauge of demand for industrial metals. SLV has moved closely along with DBB in the last 5 trading days if you take a look at the charts.
Additionally, SLV has broken its 50-day moving average to the upside (it was below it all throughout April). This may entice the technicians to buy a little, too. I’ve seen some people see a cup and handle pattern, which can be interpreted as bullish.
Overall, the fundamentals and the technicals are lining up quite well for silver bulls. I think silver is one of the best “reflation” investments out there.
I don’t know all of the factors involving the price per share of SLV, but there is a management fee of 0.50% involved in the ETF (this is common). This is possibly the primary reason why there is a divergence between the spot price of silver and the SLV ETF. The managers issued about as many shares as needed to line up the price per share with the value of their silver bullion, but the management fees will erode the value from the spot price over time. This is just like any other ETF, and the management fees are cheaper than paying expensive premiums (intangibles) for some silver products, such as Silver American Eagle coins.
I hold physical silver, but most of my silver position is in SLV. Buying the bullion includes premiums and there is materially less liquidity in the bullion. SLV gives you an economies of scale advantage, as well. I could sell SLV in my TD Ameritrade account right now, but selling the bullion takes longer and you generally will have to take haircut when selling the bullion.