I received a request from a long-term subscriber this week to more fully comment on the flows of silver into the Sprott silver ETF, PSLV, in light of the remarkable Reddit/#wallstreetbets movement, which is reported to now number more than 90,000 participants from basically nothing in January. (These silver apes get their name from the famous silverback gorillas.) From observing what has occurred with stocks that such groups have favored, only a fool would doubt their potential impact on silver. There is no question in my mind that the current severe shortage in retail forms of silver can be laid at the feet of the Reddit crowd. Likewise, I would credit them with the surge in the holdings in PSLV, since it appears to be the silver ETF most favored in these circles.
The more than 50 million silver ounces that have flowed into PSLV since the beginning of February have mostly come from a drawdown in the COMEX silver warehouses. But at the same time, there has been growth in most other silver ETFs. There has been a recent large inflow of physical silver into SLV and would expect that to continue. If this continues, no amount of manipulation will keep silver from exploding upward. We literally could see it move several dollars a day.
I laughed a bit over the U.S. Mint’s announcement that the worldwide shortage of silver was what was preventing it from producing and selling as many silver coins as are being demanded and as is required by law. The Mint certainly didn’t have any problem providing JPMorgan with as many Silver Eagles as it demanded (over 100 million) from 2011 to 2016, but can’t now meet public demand. My strong sense is that the Mint is intentionally not producing silver coins so as not to exacerbate a pinch on silver supplies.
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