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pmbug said:Gold and silver both essentially flat from Friday's close in overnight trading in China. Both are currently at a premium to the LBMA/COMEX.
SGE silver vault report for last week shows a massive outflow. SFE silver vault report for today shows more outflow at well. Remaining vault stock for both SFE and SGE are getting pretty low - at what point do the Chinese begin to worry about their own silver ocean?
Citigroup Inc. and Morgan Stanley are among banks preparing to challenge the dominance of JPMorgan Chase & Co. in the global gold market by seeking to offer vaulting services in London, as investor interest in the precious metal surges.
Citi is well advanced in the process of setting up a business that would allow it to become a clearing member of the London gold market, according to people familiar with the matter, who asked not to be identified as they weren’t authorized to speak publicly. Morgan Stanley’s plans are at an earlier stage, but it aspires to expand its physical precious metals offering to include vaulting and clearing, other people said.
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You would need a special visa to do that, but if you could trust the airlines or other transportation outfit and make it through customs without the silver getting confiscated, then okay. I would try it with a few kilo bars first. You know how customs has their hands out because of loopholes and import taxes.You and a spouse could grab 2 each 1000 oz bars from SD bullion and fly over there. Make about 30k per bar and enjoy a vacation in Bali. Write the whole thing off as a business expense and do it once a month for as long as the arbitrage lasts.
It's not easy fitting a coffee machine in your rectum.Umm no thanks, I've heard those stories about bringing metals into some countries.
How many times have you made the trip?It's not easy fitting a coffee machine in your rectum.
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So we go back to square one. The Bullion Banks APs most likely short $PSLV to suppress $PSLV from adding new #Silver bars, but not to short $PSLV for physical #Silver redemption. This aligns with $PSLV historical records.
Where are you seeing this?Currently a $140 premium on AGEs online? That is robbery.
Bullion Exchanges who is normally one of the lowest premium.Where are you seeing this?
Oh snap, you wrote AGE. I read it as ASE and was confused.Bullion Exchanges who is normally one of the lowest premium.
Well, I still don't understand, but that's ok. The Trust can buy an unlimited amount of silver, it is not limited, and it can and does issue new units of the trust periodically. Quoting one of their prospectus documents, emphasis mine:Purportedly, Sprott will buy silver and add units to the trust when it trades at a premium to NAV. Semper's thesis is that intraday shorting activity (not overall shorting activity) is designed to prevent a sustained premium to NAV to limit the acquisition of silver. Click his tweet posted above for more details including his forensic work analyzing market data.
I don't know why someone would be trying to manipulate the Trust to prevent it from buying silver, when they can issue new units and then buy more silver any time they want. Maybe someone is trying to manipulate the Trust to gain buy and sell advantages for day trading - that could be possible.The Trust invests and intends to continue to invest primarily in long-term holdings of unencumbered, fully allocated, physical silver bullion and does not speculate with regard to short-term changes in silver prices.
Thanks! I don't accept AI explanations at face value, but it does give me something to dig into. I just skimmed through a 34 page prospectus and the word premium was only used in one paragraph, twice, where it warned people against buying units at a premium to the NAV. So in order to issue new units, people have to buy at a premium to NAV, which they "discourage". Hmmmm.Grok:
The Sprott Physical Silver Trust (PSLV) is a closed-end trust that holds physical silver bullion. New units (shares) are typically added through its at-the-market (ATM) distribution program or other offerings outlined in its prospectus. This process is prompted primarily when PSLV units trade at a premium to the trust's net asset value (NAV), which reflects strong investor demand for exposure to physical silver without the logistics of direct ownership.
Key Circumstances and Process:
- Trading at a Premium to NAV: Issuance occurs when the market price of PSLV units exceeds the NAV per unit. This allows Sprott to sell new units at the elevated market price without diluting existing unitholders' value. The prospectus explicitly prohibits issuing units if net proceeds are less than 100% of the most recently calculated NAV (except in cases of income distributions). This premium-driven approach helps arbitrage the difference, as proceeds are used to acquire more silver at spot prices, expanding the trust's holdings and often reducing the premium over time.
- Investor Demand and Market Conditions: High demand for silver exposure, such as during periods of rising silver prices, industrial demand surges, or retail investor interest (e.g., avoiding high premiums on physical coins/bars), can push PSLV to a premium. For instance, when physical silver coins trade at markups of 20%+ over spot, investors may flock to PSLV, creating issuance opportunities.
- Use of Proceeds to Add Silver: All net proceeds from new unit issuances are invested in additional fully allocated, unencumbered London Good Delivery silver bars. The trust does not speculate on short-term price changes and maintains long-term holdings, so adding silver directly correlates with unit creation to match the expanded asset base.
Additional Notes:
- PSLV's structure as a closed-end fund means it doesn't have continuous creation/redemption like open-end ETFs (e.g., SLV). Instead, it relies on the ATM program, which can raise up to US$2 billion over a 25-month shelf prospectus period via underwriters, dealers, agents, or direct sales.
- Historical examples show issuances during premium periods, but the trust may trade at discounts at other times due to market sentiment, liquidity, or silver price volatility, during which no new units are added.
- Redemptions (opposite of issuance) allow unitholders to exchange large blocks of units for physical silver, but this doesn't prompt adding units/silver—it's for outflows.
For the most current details, review the latest prospectus or NAV/premium data on Sprott's website.
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