An ounce of pure silver sells for less than CAN $ 30 in cash (spot price), but good luck to the investor able to get hold of coins at this price.
Major retailers, such as Kitco, Gold Silver Bull and L’Imaginaire, sell a one-ounce silver maple leaf for around $ 39, a premium of 30% above the spot price.
Desjardins Securities portfolio manager Hugo Bonenfant brought the situation to the attention of Press.
“It is impossible for a retail investor to have physical money at the price spot, he said in a telephone interview. The only ones who can do it are the big guys like Sprott. His exchange traded trust invested in silver bullion [PSLV.TO, 10,45 $] added 60 million ounces of silver to its coffers in 2021. It is assumed that the trust bought silver futures contracts and demanded delivery of the metal when they fell due, since the amount of silver available for delivery to COMEX [le principal marché à terme sur les métaux] declined by 60 million ounces during the period. ”
As of September 30, the Sprott PSLV trust had 151 million ounces of silver in its safe deposit box. It had 91 million ounces as of December 31, 2020.
In any case, the gap observed in the silver market is abnormally high and that it is much greater than the gap existing in gold.
By way of comparison, the difference between the spot price and the counter price of a one ounce pure gold maple leaf coin is only around 7%. The spot price is $ 2,250 and the over the counter is $ 2,400 on November 5th.
The premium above the spot price is a function of volume. For example, the premium on the 100 oz bar may be half that on a 1 oz coin, Kitco explains. But, the premium depends first and foremost on the availability of metals for bullion coins.
“Two years ago, we sent an order to the Royal Canadian Mint and it was fulfilled without a problem. For over a year, we have had a specific allocation from the Royal Canadian Mint, without being able to receive more. It’s the same story for all retailers, ”says Jonathan Da Silva, negotiator at Kitco.
“Prices are set by bullion coin dealers. We have been successful in delivering our silver investment products reliably and consistently throughout the year without disruption. We are continuing to produce at full capacity to meet the increased demand from our customers, ”defends the Royal Canadian Mint, through its spokesperson Alexandre Reeves.
COVID-19 hinders production
“The premium on the money is higher than usual, for the trouble”, confirms for his part Benoit Doyon, owner of the chain of shops for collectors Imaginaire.
PHOTO PROVIDED BY THE FESTIVALS
Benoit Doyon, owner of the Imaginaire chain of stores
One-ounce silver bars from the Royal Mint, I often buy 500 units at once. I have no more. I’ve been looking for it for over a year.
Benoit Doyon, owner of Imaginaire stores
Mr. Doyon explains the limitation of the supply of products from the Royal Mint by production constraints linked to COVID-19 and by the strong demand for physical silver.
Mr. Da Silva also notes that at its current level, the premium is high on a historical basis. In March 2020, when refineries temporarily closed due to containment, the premium on physical silver climbed to US $ 9, he notes.
“At Kitco, we are net sellers [elle en vend plus qu’elle n’en rachète]. It shows that there is still interest in precious metals, says Da Silva. But, Kitco is not afraid of the stock shortage.