So far in a couple weeks of trading the silver ETF has already purchased 44 million ounces of silver, quickly on the way to the proposed 130 million ounces.
The question at present is whether or not that silver is already in physical form or if it is a paper contract waiting for delivery.
We have seen gold continue it’s march upward this last week and silver stalled out. Should be interesting if this silver is being delivered at the end of May. I think we are seeing at present the dealers making a last ditch effort to not lose their shirts. The great news for silver bugs is that the more the price is held back, the higher it will explode.
The ETF, the short position, the worldwide demand, the new uses, and last but not least the return of silver as a good investment, add up to an explosion that could rock the financial world. We have recently been seeing silver move up and down over $1 a day, something unheard of till recently. $10 a day swings is just around the corner and $100 an ounce silver could be this year.
It’s a great market no one really has an idea. Hang in there. The fun is just beginning.

Today the SEC gave the go ahead for Barclay’s to list their ishares silver etf. It will start trading tomorrow under the symbol slv. This is great news for silverbugs as it opens up a means for investing in silver without paying premiums and not having to store your bullion.
The fundamentals of silver just keep getting better. If you set up a pro’s and con’s list of, will silver appreciate in price, the only con I can come up with is that this market has been run by cons for the past 60 years but their game may be coming to an end. The beauty of this game is that a situation has presented itself and what we are now looking at is the investment opportunity of a lifetime. Silver is real. The price of silver is unreal. Buy silver, tell your friends to buy silver, and with this ETF there is really no more excuses.

WEEKLY COMMENTARY
April 25, 2006
A Long Time Coming

By Theodore Butler

It has been almost eight months since I’ve been able to write about a dealer short-covering clean out in silver. It seemed like it took forever. No matter how long it has taken, the good news to the blasting to the downside we have just witnessed is that the dealers (including Mr. Big) have used the sell-off as an opportunity to buy back a large number of their shorts. Actually, it’s a little more involved than that; the dealers created the sell-off by collusively pulling their bids on the decline. (If you’re not clear on that, please read some of my previous articles.)

Now the question becomes, is it done? Have we reached a low risk buy point? I think so, but with the tremendous volatility I can’t say it’s only dimes to the downside, the way I could at 4 or 5 or 6 dollar mark (although it may be). But I can say that there are many, many dollars to the upside, courtesy of a host of reasons not contemplated a few years ago, including the growing potential awareness of the real silver story and the prospective ETF.

I also get the feeling, whether we have seen the bottom of this silver sell-off or not, that the dealers will be very reluctant to sell the next rally, when it comes, which I think is soon. This should free the price dramatically. I say this because I think the dealers have been taught a lesson they will not soon forget. Most of you know that the lessons you have learned in life the hard way, through adversity, are those that are most obeyed. The dealers, likewise, have suffered heavy losses as a result of the 8 month silver rally and are, in fact, covering at substantial loss for the very first time in decades. I think they are more concerned with closing out their shorts and eliminating continued exposure to the upside, than they are with the losses they have booked. I think they will be reluctant to put their heads back into the lion’s mouth by going short again…

News came out yesterday announcing that on Friday Barclay’s of London had 1.5 million ounces of silver stored for the silver ETF. They submitted info to the SEC yesterday.

Now they only need to come up with 128.5 million other ounces for fully backing the fund. Everyone is wondering where this will come from. Could get interesting. People interested in buying physical silver will find this the best way. they won’t get killed by premiums over spot and they don’t actually have to hold silver in physical form.

The Silver User’s Association petitioned the SEC to not have this fund stating that the silver market was to illiquid to handle such a purchase and it would force the price of silver up and jobs would be lost etc. etc. This from an organization which was formed 60 years ago with one purpose, to keep the price of silver low. Sorry boys the party may be ending and you may have to get in line with the rest of us to buy silver at a fair market price.