Posted 26th February 2021

Why can’t SLV source enough silver?


Andrew Maguire explains why SLV can’t source enough silver bars to meet demand.

Watch this week’s Live from the Vault for:

  • How will Basel III affect the COMEX?: 02:23​​​
  • BIS scrambles to unwind unallocated positions: 12:18​
  • Catch 22 arbitrage trade in action last Friday: 16:44​
  • Banks stand for delivery on COMEX for April contracts: 18:47
  • Why can’t SLV source enough physical silver?: 21:33
  • The bullish silver set up explained: 24:55​
  • Astronomical 2023 gold and silver price targets: 28:02

Andrew Maguire believes significantly underpriced silver is behind BlackRock’s admission of potential difficulties in acquiring sufficient silver for iShares Silver Trust (SLV).

What’s happening with SLV?

The SLV prospectus now reads that BlackRock “may not be able to readily acquire sufficient amounts of silver,” required for the creation-redemption process behind the silver ETF.

From a wholesale perspective, the statement translates as “SLV is unable to source enough wholesale 1000 oz silver bars to fill its baskets,” according to Andrew Maguire. As Andrew Maguire sees it, the availability of silver is not the cause of the issue. The precious metals expert attributes the shortage to the lack of “availability of silver at current diluted prices.”

Watch Andrew Maguire detail the unknown market entity that defended the silver pushback in last week’s Kinesis show ‘Live from the Vault’

What’s the wholesale price of silver?

According to the wholesaler, there are “ample wholesale 1000 oz silver bars to supply to really fulfil every incoming SLV by order,” however, “the price would have to be significantly higher.”

The precious metals expert believes that “every single ounce of SLV demanded could be easily fulfilled in allocated form at a true supply demand global wholesale offer price.” Andrew Maguire added, “if the price of silver was allowed to reflect true global supply demand fundamentals thousands of tons of physical silver could flow into the SLV.”

However, the precious metals expert estimates that meeting current demand would require a silver price of “at least $30 – $40 per ounce.”

Andrew Maguire’s parting thoughts:

These conditions present one of the most bullish setups in silver since June 2010

Make sure you catch next week’s Live from the Vault.

The opinions expressed in this publication are those of Andrew Maguire and do not purport to reflect the official policy or position of Kinesis.

This publication is for informational purposes only and is not intended to be a solicitation, offering or recommendation of any security, commodity, derivative, investment management service or advisory service and is not commodity trading advice. This publication does not intend to provide investment, tax or legal advice on either a general or specific basis.