The exchange-traded fund industry has bet a lot on commodity funds, which have dominated ETF launches in 2006, and so far, investors are rewarding their faith. A pair of highly-anticipated new commodity-based funds launched last month has been met with gobs of fast cash.

“There’s been a lot of interest in commodities,” says Dan Culloton, and ETF analyst with Morningstar Inc., “because of the way their prices have run up in recent years. It doesn’t surprise me that an ETF focused on silver would attract some attention from people who are attracted to that performance.”

That fund, Barclays Global Investors’ iShares Silver Trust – the world’s first silver ETF – launched on the American Stock Exchange April 28, and has attracted more than $600 million in assets in its first two weeks of trading.

“It certainly seems to have exceeded most peoples’ expectations,” posits UBS precious metals analyst John Reade. “There’s considerable excitement about the ETF in the silver market already.”

The 4.4 million silver ETF shares outstanding represent slightly less than 44 million ounces of silver, which Reade says is in line with his forecast of between 60 and 100 million ounces after one month of trading. Citing State Street Global Advisors’ StreetTRACKS Gold Shares, which after roughly 18 months of trading now holds more than $7.7 billion in assets, Reade expects that the “initial surge” of interest in the silver fund is “maybe coming to an end right now, and then we’ll probably see more investment in this over the next few years.”

The Silver Trust’s performance has reignited the fears of some opponents of the silver ETF, primarily industrial users of the metal. They had argued against its launch, saying that as the ETF, like its gilded counterpart, actually holds physical silver, it threatened jobs by pulling silver off the market and pushing silver prices up. BGI’s initial registration statement suggested that up to 130 million ounces of silver could be needed; one-third of that total has already been locked up in the ETF’s vault.

“Demand is more significant than I think the folks had imagined,” says Paul Miller, executive director of the Silver Users Association, one of the fund’s biggest detractors. “Whenever you take that kind of silver out of the market, it’s going to have repercussions. The question becomes, how significant?”

Reade says it has already had an effect. “Silver’s trading at about $14,” he says. “If it weren’t for the existence of the ETF, it’d be trading at about $10 or $11.”

Where in Reade’s predicted range the AUM for the ETF falls after a month should be a good indicator of how big the impact of the fund on silver prices will be.

“Let’s say it gets to 60 million ounces, and then grows slowly over the next few years, there won’t necessarily be a massive impact on the silver market, and we could even see some profit taking,” he says. “But if it gets to the upper under of my forecast and keeps growing quite rapidly, then you could get to the stage where it causes the silver market to go considerably higher.... You could be looking at a one-off shock to the silver market.”

One market that’s not likely to be roiled by a new ETF is that in oil, which also got its first U.S.-listed fund last month on the AmEx. The United States Oil Fund, sponsored by ETF newcomer Victoria Bay Asset Management, was an actively traded name in April – it launched on April 10 – boasting some $1.4 billion in volume during its first four weeks.

It garnered nearly $250 million in assets during that period, far below the silver ETF, but, Culloton says, “a couple hundred million isn’t a bad start for a month.” He speculates that the slower start for USO might have to do with Victoria Bay being a green player in the industry.

“Just the fact that they are relative unknowns might be curbing enthusiasm a little bit,” he says.