10 January 2014

NAV Premiums for Precious Metal Trusts and Funds - 83,890 Ounces Redeemed From Sprott Gold

Since the last time I had checked earlier this month there was a redemption of 10,072,357 shares for 83,890 ounces of gold bullion from the Sprott Physical Gold Trust.  That is about 210 London Good Delivery bars.

I have heard some rumours about who has been asking around for delivery, but in checking I do not see anything official from the fund, so why speculate.  But for a redemption of over $103 million, I doubt it is the eBay crowd shuffling up to the window, so it is probably one of the usual suspects, the inside outers, not the big morgue macher. 

But then again, the Morgue has been in an acquisitive mood, and some say it is standing on a corner.

Redemptions at Sprott Gold had been very unusual, until recently it seems. Apparently that is changing, as the scraping of the bottom of the bullion barrel proceeds.  No wonder the fiatscos are getting restless.

Yeah, there is no unusual demand for physical gold bullion in Asia. Nothing to see here, move along. 

At least Sprott runs a fully allocated ship.  If a 'run' on the unallocated pools of gold starts, this could really get interesting.  

Deleveraging in a short squeeze.  Could be some tough love, kitten.

There was no activity in the Sprott Silver Trust.  But the cash levels in the PSLV Trust have gotten back down to the levels where another secondary offering of expansion might be in the offing sometime this year.  That would be a big physical buy in another tight market.  It could help to provide a 'come-to-Jesus' moment, as some have suggested.

But as we know all too well, anything goes in times of general deceit, with frickin' lasers, and the Banks breaking bad.  So let's just see what happens.

From the Sprott website for PHYS.
Unitholders will have the ability, on a monthly basis to redeem their units for physical gold bullion for a redemption price equal to 100% of the NAV of the redeemed units, less redemption and delivery expenses, including:
•the handling of the notice of redemption
•the delivery of the physical bullion for units that are being redeemed (estimated at $5 per troy ounce at the time of the prospectus, Feb. 2010 for delivery anywhere within continental US and Canada)
•and the applicable gold storage in-and-out fees (minimum $50 plus $5 per each additional bar, at the time of the prospectus).
Redemption requests must be for amounts that are at least equivalent to the value of one London Good Delivery bar or an integral multiple thereof, plus applicable expenses. A ''London Good Delivery bar'' weighs between 350 and 430 troy ounces (generally, most bars weigh between 390 and 410 troy ounces).