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London Source - Asians Buying SLV to Take Delivery of Silver

With gold up over $10 and silver attacking multi-decade highs, the London Source has given King World News major news on the activities of the Asian buyers, “Not only have the the Asian buyers been purchasing large numbers of shares of the ETF GLD in order to take delivery of gold, but they have now in fact decided to buy SLV with the intention to take physical delivery of silver directly from that ETF.”
February 15, 2011

The London Source continues:

“You have to remember that BlackRock sponsors SLV and I don’t believe they will let anything happen to tarnish their good name. It would reflect badly on BlackRock if in fact SLV did not contain the physical silver to back up the shares, so the Asians will be successful in draining physical silver directly from SLV. The bottom line is they are comfortable with BlackRock being involved in the ETF SLV.

In the end, BlackRock will have to ensure that the silver ETF makes good on redemptions from SLV.

Another complicating factor is that there are currently 16.12 million shares short on SLV. This is an increase of almost 2 million ounces over the prior reading. In other words BlackRock will also have to make sure that this silver which has been borrowed will be returned.

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