Physical silver demand continues to strain paper proxies. The London pm fixed (physical) to paper proxy ETF (paper) ratio, illustrated below, has already pushed beyond the June 2006 and March 2008 premium extremes. November's ‘mini scramble’ for physical silver is only exceeded by those of August and October 2008.
The recent adjustment to margin requirements and paper hit to price intended to cool off the market. The rising premium spread since 2010 suggests that the cool down won’t last long. The next surge will be more difficult to stop.
Physical to Paper Proxy Spread:
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