/biz/ - Business & Finance

>>30087333
>>30087533
Checked

https://www.bullionstar.com/blogs/ronan-manly/silversqueeze-hits-london-as-slv-warns-of-limited-available-silver-supply/

“The demand for silver may temporarily exceed available supply that is acceptable for delivery to the Trust, which may adversely affect an investment in the Shares.

To the extent that demand for silver exceeds the available supply at that time, Authorized Participants may not be able to readily acquire sufficient amounts of silver necessary for the creation of a Basket.

Baskets may be created only by Authorized Participants, and are only issued in exchange for an amount of silver determined by the Trustee that meets the specifications described below under “Description of the Shares and the Trust Agreement— Deposit of Silver; Issuance of Baskets” on each day that NYSE Arca is open for regular trading. Market speculation in silver could result in increased requests for the issuance of Baskets.

It is possible that Authorized Participants may be unable to acquire sufficient silver that is acceptable for delivery to the Trust for the issuance of new Baskets due to a limited then-available supply coupled with a surge in demand for the Shares.

In such circumstances, the Trust may suspend or restrict the issuance of Baskets. Such occurrence may lead to further volatility in Share price and deviations, which may be significant, in the market price of the Shares relative to the NAV.”


SLV and GLD are futures contracts and as such are basically IOUs. For Silver, there are anywhere between 100 and 180 shares of SLV for each physical ounce in the vault. 100 and 180 other people can lay claim to the same ounce of silver that you do. When push comes to shove, are you going to be the one to get that ounce of silver? The prospectus above says no, their preferred partners have priority, meaning the bullion banks and other institutions.

Read to what happened to Palladium when paper no longer matched physical price.