“There’s two parts — there’s the problem of getting silver for the SLV and in addition the COMEX,” mentioned Nick Barisheff of BMG Group.
Silver surged into mainstream headlines in late January because the “silver squeeze” narrative took maintain, however what’s occurred to the white steel within the weeks since then?
Chatting with the Investing Information Community, Nick Barisheff, president and CEO of BMG Group, mentioned the story continues to be alive and nicely. In his view, there are two key factors silver-focused buyers ought to pay attention to.
“I believe the factor that individuals ought to perceive (is) there’s two parts — there’s the problem of getting silver for the SLV and in addition the COMEX,” he defined.
The COMEX is a futures and choices marketplace for a range metals, together with silver. Barisheff famous that usually 90 p.c of futures contracts on the COMEX settle in money and never bodily supply — however that would probably change quickly, as March is a month the place supply might be requested.
“The issue the COMEX has is that they have (by) some estimates 100 contracts for each ounce of silver. So if everyone stands for supply, then now we have an enormous downside on the COMEX,” he mentioned.
“In all of the ETFs, the trustees or the custodians don’t exit and purchase silver as buyers purchase shares. They’ve approved individuals, that are usually the massive banks and brokerage homes. They contribute a basket to the ETFs — within the case of gold, it’s 400 ounce bars; within the case of silver, it’s 1,000 ounce bars. That’s the place the distinction lies,” mentioned Barisheff, who can also be the writer of “10,000 Gold.”
“The factor is that … central banks purportedly maintain 30,000 tonnes of gold in varied central banks. So the approved individuals usually can borrow gold from a central financial institution and so they contribute it to the ETF. However central banks don’t maintain silver, and there’s a restricted quantity of bodily silver in London. So if an increasing number of individuals purchase shares (of SLV), they might successfully run out of silver.”
Watch the video above for extra from Barisheff on the standing of the silver squeeze and what buyers ought to know throughout this fascinating time within the area.
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Securities Disclosure: I, Charlotte McLeod, maintain no direct funding curiosity in any firm talked about on this article.
Editorial Disclosure: The Investing Information Community doesn’t assure the accuracy or thoroughness of the knowledge reported within the interviews it conducts. The opinions expressed in these interviews don’t replicate the opinions of the Investing Information Community and don’t represent funding recommendation. All readers are inspired to carry out their very own due diligence.