Saturday, January 7, 2012

Silver now in backwardation as paper and physical prices much different

Wall Street always wants people to focus on the paper products they sell, and in doing so, try to establish false prices for commodities such as gold and silver.

Fortunately, those who own physical metals are usually not fooled when the paper prices fall, or rise based on rumors and manipulation.  This can be expressed in no better terms than backwardation.

Take for example Eric Sprotts PSLV etf which is truly backed 100% with physical silver.  Even as the futures price at the CME and NY markets have fallen some 30%, the premium for the actual physical silver has JUMPED 30% to equate the actual price value vs the paper price.

...one can either try to procure gold and silver at a retail merchant, or one can look to the premium of a dedicated physical ETF over spot. Such as Eric Sprott's PSLV which as of today is trading at an all time high premium of 30%! In other words, someone is willing to pay up to 30% over spot for the right to be closer to the physical metal than merely have a paper claim on a paper claim (pre hyper rehypothecation and what not). - Zerohedge

Courtesy of Zerohedge

So always check and double check the claims of price falls on silver and gold, especially if you hold the physical metal.  Supply and demand rule the actual price much more than bank determination to prop up the fiat dollar, and keep the people in the dark on the metals true value

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