The silver spot price is below US$30 per ounce, but buyers are paying as much as US$50 for physical metal, said Nick Barisheff of BMG Group.
The silver squeeze story has been making headlines for months now, but even with this increased attention, the white metal’s price remains below the US$30 per ounce level.
“I think the US$50 price is more realistic … it’s not a theoretical ask price — people are buying coins and so on at that price. So as time goes on, it’s a good area to monitor for what the real physical price is,” he explained in a conversation with the Investing News Network.
“The spot price — that’s largely for very large buyers that typically buy 1,000 ounces bars, that type of thing and so on,” he added. “Once you get down to the coins (US$50 is) a more realistic price.”
Barisheff said it’s clear that demand for physical silver is high, and noted that aside from retail buying, more COMEX participants are requesting physical delivery of the metal.
“We’ve had massively more requests for (COMEX) delivery than normal, so that’s an indicator that more and more people are looking for physical,” he said. “There’s been rumors of shortages from the Perth Mint for converting your unallocated accounts to physical — people are concerned about why (there are) delays and so on. So these things are all coming together.”
When asked why prices for silver and gold aren’t higher considering the numerous positive influences at play right now, Barisheff said he believes market manipulation is to blame.
“I think anybody that studies the issue in any great depth will come to the conclusion that the prices have been manipulated by the paper markets,” he explained. “(But) any kind of manipulation ultimately fails and prices have to go back to their mean.”
In terms of what could make that happen, Barisheff suggested that pension funds entering the market could be key. Right now only four of them have “meaningful” positions in gold, but he believes that if more of these entities get involved, that could break the hold of manipulative forces.
Watch the interview above for more from Barisheff on what’s happening with precious metals right now.
Don’t forget to follow us @INN_Resource for real-time updates!
Securities Disclosure: I, Charlotte McLeod, hold no direct investment interest in any company mentioned in this article.
Editorial Disclosure: The Investing News Network does not guarantee the accuracy or thoroughness of the information reported in the interviews it conducts. The opinions expressed in these interviews do not reflect the opinions of the Investing News Network and do not constitute investment advice. All readers are encouraged to perform their own due diligence.