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Stefan Gleason:
Never has silver been as cheap to acquire in real terms as it is today. Never has the silver market traded so wildly disconnected from its fundamentals. Never have the silver bullion and silver futures markets diverged so greatly.
Whereas shortages and premium spikes are taking hold In American Eagles and other popular silver bullion products, the opposite is occurring on the exchanges. For example, one exchange-traded silver vehicle, Sprott Physical Silver Trust (PSLV), briefly traded down to a record 10% discount to its own net asset value.
On Monday, another inexplicable trading anomaly occurred. On a day when the general stock market suffered a 13% nosedive, the Silver Miners ETF (SIL) surged higher by 13% -- and it's surged again today. Yet spot silver prices had plunged by 12% at the same time.
If silver is down double digits and the equity market is also down double digits, how in the world do silver mining equities rise by double digits?
It makes no sense, unless the markets are completely broken and totally arbitrary at this point. Or unless big money counterintuitively flowed into the mining sector because the silver spot price has lost credibility.
Perhaps mining stock investors believe the actual physical silver market is already beginning to dictate higher prices (as reflected in surging premiums for silver coins) than what are being quoted in the paper market.
Perhaps we just witnessed a capitulation bottom in silver and at least a temporary peak in investor fear more broadly.
Never has silver been as cheap to acquire in real terms as it is today. Never has the silver market traded so wildly disconnected from its fundamentals. Never have the silver bullion and silver futures markets diverged so greatly.
Whereas shortages and premium spikes are taking hold In American Eagles and other popular silver bullion products, the opposite is occurring on the exchanges. For example, one exchange-traded silver vehicle, Sprott Physical Silver Trust (PSLV), briefly traded down to a record 10% discount to its own net asset value.
On Monday, another inexplicable trading anomaly occurred. On a day when the general stock market suffered a 13% nosedive, the Silver Miners ETF (SIL) surged higher by 13% -- and it's surged again today. Yet spot silver prices had plunged by 12% at the same time.
If silver is down double digits and the equity market is also down double digits, how in the world do silver mining equities rise by double digits?
It makes no sense, unless the markets are completely broken and totally arbitrary at this point. Or unless big money counterintuitively flowed into the mining sector because the silver spot price has lost credibility.
Perhaps mining stock investors believe the actual physical silver market is already beginning to dictate higher prices (as reflected in surging premiums for silver coins) than what are being quoted in the paper market.
Perhaps we just witnessed a capitulation bottom in silver and at least a temporary peak in investor fear more broadly.
