![]() ![]() What comes to mind is guys with forklifts moving bullion from one part of a warehouse to another, into the account of another silver market participant. That makes five vaults in total with subcustodians operating three. Transportation costs would presumably also present a problem.Īccording to the Inspection of Silver Bullion document on the SLV website (dated July 2010), there are two vaults operated by JPM, two vaults operated by Brinks Global Services, and one vault operated by Via Mat International. How is it possible for the SLV to buy and sell such large quantities of silver on a daily basis when no one else, it seems, can do so? It's expensive to procure physical silver, and usually takes much longer than a day. Here is a chart of the trust's silver holdings since the start of April (click to enlarge): For example, they decreased their holdings by 33 metric tons on Thursday.Īll the data is available on the iShares website in the left hand column. Silver coins at shops like the American Precious Metals exchange sell for a premium of over 9%.Īdd these two together and it seems really weird that the SLV can increase and reduce its silver holdings daily seemingly with no trouble. Sprott's fund has traded in recent days at about a 20% premium to the spot price. Second, the silver shortage has caused premiums for the physical metal to skyrocket. Various mints, including the US Mint, are also unable to get sufficient supplies. Eric Sprott, who runs, among other things, a physical silver fund ( PSLV), has commented often in the recent past on how hard it is to buy physical silver in large amounts. Here are two.įirst, there is a silver shortage. People are suspicious of the SLV for a number of reasons. It also brings to mind the often quoted phrase, "never believe anything until it's been officially denied." It's also reminiscent of the other Wall Street CEOs saying everything was great and they didn't need to borrow any money while they were borrowing billions and teetering on the edge of insolvency. This reminds me of the CEOs of Bear Stearns and Lehman Brothers saying everything is fine shortly before their banks collapsed. According to Zero Hedge, Kevin Feldman, managing director of iShares, issued a refutation of the rumors that the SLV contains no physical silver. Mainstream media hasn't weighed in on one side or another, but the blogosphere and Youtube are full of various accusations and speculation.Īn interesting thing happened a day or so ago. The controversy is whether there is a vault that actually contains the amount of silver iShares says it does. ![]() Because the holders of iShares are not parties to the custodian agreement, their claims against the custodian may be limited. It is responsible for holding the trust's physical silver in its vaults. It is responsible for the day to day administration of the trust, including processing orders, coordinating with the custodian, calculating the net asset value of the trust, and selling the trust's silver to pay for expenses. The trustee is Bank of New York Mellon ( BK). It assumes certain marketing and administrative expenses of the trust. It arranged for the creation of the trust and its listing on the NYSE Arca. The sponsor, iShares, is a subsidiary of BlackRock ( BLK). Three main parties are responsible for the SLV. That is, there's supposed to be a vault somewhere with a bunch of physical silver and each share of the SLV is supposed to represent about an ounce. Is for the value of the shares of the iShares Silver Trust to reflect, at any given time, the price of silver owned by the iShares Silver Trust at that time, less the iShares Silver Trust's expenses and liabilities. The objective of the exchange traded fund, according to the iShares website: The iShares Silver Trust ( NYSEARCA: SLV) has been the subject of controversy since it first started trading. ![]()
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