On Platinum & Palladium Joining the Party:
Wall:
“The platinum and palladium run make me think that this move in silver isn’t entirely related to silver shortage, but we are also experiencing a run for hard assets in general here.
I’m hoping we don’t see a 2008/2009 chart comparison scenario as everything is clearly different.
Shortage is what makes it CRYSTAL CLEAR that this case is currently different because silver specifically was not.
Is SD Bullion’s Gold & Silver Inventory Still Unhedged?
Wall:
“Since inception, SD Bullion has almost always had roughly 90% of net asset value in precious metals. We maintain a fixed ounce position across all metal types. When we exceed the position through large direct mint purchase, we will short only the delta difference of what we are over the target position by.
When we sell ounces to our customers, we will purchase metal to get us back to the target position or occasionally go long a few futures contracts.
Due to the high volume of ounces we trade, we rarely have more than a few future contracts open in either direction. This is only made possible because we have zero debt and no banks to answer to. It’s by far the most fiscally responsible way to manage a precious metal business with minimal amount of capital needing to be deployed in futures accounts.
Furthermore, you are able to capitalize on USD devaluation and precious metals appreciation in value.
Unlike some of the other bullion dealers, we actually believe in gold & silver, and benefit when the metals go up in value, just like our customers!
ST: If silver continues to go parabolic here, at what point would you consider hedging your ounces with an offsetting short position, to “lock in” gains?
Wall:
“Maybe would consider hedging a small percentage when silver gets to 4 digits.
Otherwise it’s not a consideration at this time.”
ST: Sounds like your thinking aligns with David Bateman on the 4 figures. I think we all could “consider” letting go with a portion of our stack when silver reaches $1,000 per troy oz!
