Wednesday, August 17, 2011

Sprott Selling $30 Million of PHYS, Plowing Proceeds into PHYZZ SILVER

eric sprott

Eric Sprott is exchanging $30 million worth of his own gold ETF PHYS for silver at the current 45:1 ratio.
Stop whining that silver has not been following gold higher for the past 2 weeks, and use the relative weakness vs gold to add to your silver position professionally like Mr. Sprott.

The Sprott Foundation, named after Eric Sprott, announced that it is selling two million units of its Sprott Physical Gold Trust (PHY.U-T15.770.070.45%), worth about $30-million at Wednesday's price.
In its announcement, Sprott said that the proceeds would be reinvested in the silver sector, which isn’t surprising because Mr. Sprott has been touting the silver (SI-FT40.380.571.42%) story of late.

But there’s something to be said about what the sale means for gold (GC-FT1,794.109.100.51%). In a recent interview with the GoldMoney Foundation, Mr. Sprott said that “gold was the investment of the last decade,” adding “I think silver is going to to be the investment of this decade.”
Given that view, why wait until now to sell the gold units? Just look at the market price for the Physical Gold Trust. Since July 1, it’s shot up 22 per cent. By selling, Mr. Sprott appears to be taking some money off the table to take advantage of such a drastic spike -- though he does still personally own six million trust units.
Although the foundation announced that it would reinvest its money in the silver sector, it is interesting that it did not specifically say where it would invest, either in Sprott Physical Silver Trust (PHS.U-T18.790.140.75%), or the metal itself. But if you look at Sprott’s recent selling activity, it’s clear that money will go into the metal.Read more: