A Silver Price Surge Coming? Sprott To Buy $1.5 Billion Of Silver Bullion! (PSLV, SLV, AGQ, ZSL, GLD)

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November 23, 2011 4:52pm NYSE:AGQ NYSE:GLD

Dominique de Kevelioc de Bailleul: The silver price could explode higher in coming months. As the silver and gold price predictably fade ahead of option expiration, JP Morgan’s bullion manipulation scheme could be headed for unprecedented problems, not from the record purchases of gold and silver from


the Chinese, Indians or Russians, but from one Canadian billionaire. Get my next ALERT 100% FREE

Canadian-based Eric Sprott Management CEO Eric Sprott filed a follow up prospectus for the purchase of an additional $1.5 billion of silver bullion to cover expected demand for the company’s exchange traded fund (ETF), PSLV.

Combined with the recent decline in the PSLV premium to spot  silver to 14 percent from the typical 20 percent, along with Sprott’s reported sale of some of its holdings of PSLV at the rich premium, it appears a  familiar hallmark of a gigantic $580 million silver bullion purchase in December of last year emerges once again.  Since demand  for silver products at Sprott remain brisk, it should come as no surprise to the silver world that Sprott needs more silver.

Yet, only two Web sites mention the breaking news, The  Globe and Mail and bullion market reporter Harvey Organ, HarveyOrgan.blogspot.com.   Don’t expect Eric Sprott to herald the milestone purchase; he’s trying to avoid  investors front running the purchase.

“Since Sprott filed its prospectus last Friday, PSLV units have come down 12 percent, while the price of silver has dropped only 6 percent,” stated Canada’s  daily newspaper, The Globe and Mail, on Nov. 18.  “Whether or not the new  filing is the root cause of the difference doesn’t affect Mr. Sprott much. He  has been selling his PSLV units for most of the year (as documented by kid  dynamite.)”

Because Sprott today represents ½ the size of the Hunt brothers wallet and their  attempt to corner the silver market in 1979-80, nimble investors have taken  advantage of the bulky Sprott in the past by front running his purchases, as his  size and legal entity requires him to file with Canadian regulators—an issue he  laments of during his interviews.

But for silver investors, the regulation could be a boon to the silver price, as the last time Sprott needed substantial inventory, the silver price soared 177 percent, though Sprott’s purchase cannot directly be proven to be responsible for all of that monstrous move.

However . . . more than four years earlier, in April 2006, prior to the launch of the NYSE version of PSLV, the Barclay’s iShares Silver Trust SLV, spot silver at the COMEX more than doubled at its price peak leading up to the launch of the SLV to $15 from $7.50, as late as September 2005—a double within six months, or a 200 percent ARR.

Moreover, further evidence of a coming silver price mega pop may be gleaned from the exciting silver rally of July 2010 to April 2011. That monstrous rally could easily be rivaled soon, as Sprott apparently gears up for a whale of a purchase, $1.5 billion of silver bullion—a nearly three times last year’s $580 million purchase and coincidental 177 percent explosion of the silver price.

“Today the Globe and Mail announced Eric has filed a short form follow up Prospectus for a billion five physical silver,” respected bullion market blogger Harvey Organ wrote in a Nov. 21 post. “holy jeepers, it could be approved in as little as two weeks people tell me, and he can trigger it OVERNIGHT without warning. Just bang, if he has got the orders. WE all know what happened with his last Physical Silver Issue, it was 580 million and blasted Silver 18 to 50 bucks in 5 months.”

Considering the fundamentals underlying the raging bull market in silver and the confident predictions of, in some cases, another double in the silver price, at least, by spring from industry peer James Turk of Goldmoney, as well as other hard money heavyweights, Ben Davies of Hinde Capital, Jim Rickards of Tangent Capital Markets, Euro Pacific Capital CEO Peter Schiff and QB Asset Management Co-founder Paul Brodsky, it appears the industry insiders to the tiny world of silver anticipated Sprott’s need to replenish—and when Sprott needs silver look out.

Related Tickers: Sprott Physical Silver Trust (NYSEARCA:PSLV), ProShares Ultra Silver (NYSEARCA:AGQ), SPDR Gold Trust (NYSEARCA:GLD), ProShares UltraShort Silver (NYSEARCA:ZSL), iShares Silver Trust (NYSEARCA:SLV).

By Dominique de Kevelioc de Bailleul From Beacon Equity Research

BeaconEquity.com is committed to producing the highest-quality insight and  analysis of small-cap  stocks, emerging technology stocks, hot penny stocks and helping investors make  informed decisions. Our focus is primarily OTC stocks in the stock  market today, which have traditionally been shunned by Wall Street.  We have particular expertise with renewable energy stocks, biotech  stocks, oil stocks, green energy stocks and internet stocks. There are  many hot penny stock opportunities present in the OTC market everyday and we  seek to exploit these hot stock gains for our members before the average  daytrader is aware of them.


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