21 November 2013

NAV Premiums Of Precious Metal Trusts and Funds - 17,256 Ounces of Gold Leave PHYS

When I did my update today I noticed that the number of ounces held in the Sprott Gold Trust has declined by 17,256 ounces. I believe this is a very recent development. That is over $21.5M in gold bullion that has been redeemed which is a fairly large amount. I don't think it's for Hanukkah gelt.

With these paper price raids on gold, the redemption terms at PHYS must look good compared to the premium one can obtain to physical gold in Asia. Given the integrity of PHYS and the cost and bother of a redemption, it must be due to some significant price differentials. Or someone just sees something coming, and wants to have their gold very close to home, wherever that might be.

There were no changes at the Sprott Silver Trust, except for the usual reduction in cash on hand. The cash levels there are getting down to the point where I suspect that Sprott will consider another shelf offering sometime within the next six months at most.

Gold is flowing from West to East. It is a somewhat unique phenomenon, seen markedly in the ETFs and Funds that hold physical gold. I have not seen anything like it before in my memory.

This drawdown in physical gold inventories in the West is remarkable, especially when compared to the other precious metals and silver.

It seems to me to be a fairly strong indication of a mispricing in the market, most likely caused by the blatant price manipulation we see almost every day on the Comex.

But what is surprising to me is that we see the same kind of antics in the silver price, but the silver inventory is robust and even slightly increasing. I suspect that we are seeing Mideastern and Asian powers gearing up for a big 'currency event.' What exactly it is and when it will happen no one really knows, but when it does happen it will be noticeable, that I can almost guarantee.

When Nick Laird takes a break from the barbie, I will ask him for an update on the ETF drain, probably near the end of November. 

This is going to get interesting. Historic, I suspect.