Socio-Economics History Blog

Socio-Economics History Blog

FLASH: Silver ETF SLV Admits Trouble Sourcing Metal And Vulnerability to ‘Dramatic’ Short Squeeze

by mosesman

  • FLASH: Silver ETF SLV Admits Trouble Sourcing Metal And Vulnerability to ‘Dramatic’ Short Squeeze
    by cpowell, http://gata.org/
    Dear Friend of GATA and Gold (and Silver):
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    The silver exchange-traded fund SLV appears to have just amended its prospectus to acknowledge difficulty in sourcing metal for the fund. The amendment warns that the fund now may be vulnerable to a “dramatic” short squeeze — like the recent short squeeze in GameStop shares that caused a worldwide sensation.
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    The change, cited by Bullion Star tonight on Twitter, seems to have been prompted by this month’s Reddit-inspired movement to attack shorts in the monetary metal. SLV does not appear to have issued any announcement of the amendment to its prospectus, perhaps trusting that monetary metals advocates would find it eventually and save the fund the trouble of alerting the markets.
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    SLV’s updated prospectus, dated February 8 and posted at the iShares internet site here —
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    https://www.ishares.com/us/literature/prospectus/p-ishares-silver-trust-…
    — reads as follows:
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    “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.
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    “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.
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    “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 New York Stock Exchange Arca is open for regular trading.
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    “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.
    –
    read more.

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