gene arensberg writes about silver (and gold)

Believe it or not, silver is not far from unchanged since SLV got underway in 2006. What HAS changed is that over 9,000 tonnes of the world’s available bar silver in London has been removed from the market over the period. We are of the firm opinion that silver ETFs are closing in on a supply inflection point. That’s also a subject for a future report.

Clearly there has been consistently more buying than selling pressure for the world’s largest silver ETF with only minor pauses in investor accumulation since SLV first began trading four years ago. That continued popularity is despite the brutal, panic rush to liquidity in Q3 of 2008, which is the dominant feature of the SLV trading record above.

We will have much more about this divergence in buying pressure between gold and more volatile silver ETFs in a future special report, but for now we would point out that as buying pressure for gold ETFs has been more or less balanced over the past year or so, there has been consistently more buying than selling pressure for the largest silver ETF as shown in the graphs above. We also note that the gold/silver ratio (GSR) is still quite high historically speaking (see below) and some investors may be taking advantage of the higher GSR to convert some gold ETFs into silver ETFs.