PSLV premium soaring

Today the premium for PSLV soared to its all time high of 30% to spot price.

Why on earth would someone pay a 30% premium to spot price? Yes, exactly because the physical silver is much safer as the paper silver. It just shows that physical and paper silver are decoupling. It also shows that physical silver will soon lead the market price of silver. People buy at these high prices because they see silver prices going up in the future.

I’m also recently keeping an Excel file with the price of PSLV/PHYS together with the premium of PSLV/PHYS over time. Let’s see which correlation I can deduct from these numbers.

You can find the premiums on the Eric Sprott sites:
PHYS premium
PSLV premium

PSLV PHYS premium in function of time

From today on I’m going to monitor the premiums of PSLV and PHYS in function of time and monitor the stock price of PSLV and PHYS. I also asked HR to send me the numbers, let’s see if they will do it.

Then after a while I’ll try to see if there is any correlation between price movements between the premium and the share price of PSLV and PHYS.

These below are the premium and the price charts for PHYS (2010):

Source: http://www.investingdaily.com/14269/global-trend-following-etfs

Looks like both charts correlate well. Premium goes up, price goes up. This happened until September 2010. Then suddenly the premium went down while the price of PHYS went up. I need more data to get to a conclusion…

For an analysis of PSLV go here:

PSLV premium analysis