Rule – The Physical Silver Market Is Getting Dangerously Tight
July 17, 2012
With continued volatility in global stock markets, and gold staging a big rally off of the lows, today King World News interviewed one of the wealthiest and most street-smart pros in the business, Rick Rule. Rule told KWN that when it comes to silver, “there is the strong case for some very substantial upside.”
Rule, who is now part of Sprott Asset Management, discussed silver and gold at length. He also talked about the problems the world currently faces. But first, here is what Rule had to say about Sprott’s very successful offering in the Sprott Physical Silver Trust: “I think it’s evidence of two things: One, we felt we had reasonably good chances of buying the silver if we raised the money. Second, this points to the continuing strength of the high end retail investment market for silver in North America.”
Rick Rule continues:
“The offering was well received. It was sold out, including the green shoe (over-allotment). This is also evidence of the fact that while some of the more leveraged institutions have been forced sellers of silver, there is still very strong high end retail demand. These are individuals who don’t feel financial stress, and who feel better owning physical silver.
I think this is the kind of thing you will see Sprott do, from time to time, when there is demand in the market, and also when supplies can meet that demand. As you know, with regards to the Sprott Trust, unlike some of the ETF’s, we own physically our silver. There are no deposit receipts and our silver is never hypothecated.
Although supplies might be adequate for us to buy that silver, the fact is that the physical market continues to get tighter….