In general, the number of ETF certificates in circulation varies according to the market movement of the underlying instrument.
In the case of gold, compared with the start of the year, there are fewer certificates in circulation which correlated with the lower gold spot price (up to the crash). In the case of silver however, which was trading just a notch below the price seen at the beginning this year, the number of certificates in circulation has remained constant. Even after this week’s price consolidation, the number of outstanding certificate still remains constant. In other words, there were as many buyers in the market as sellers. Given that we are talking about silver ETF, this is a very unusual equation.
The events observed this week however, give us a further message!
It can be taken as a pre-indication that the low interest environment which we have been living in for years, is now coming to an end; probably sooner rather than later. If that hypothesis is correct, we are shortly going to experience the biggest asset rotation of the past 15 years.