US SILVER NONPROFIT OPPOSES NEW SILVER-BACKED ETF
NEW YORK, Oct 12 (Reuters) - A U.S. silver industry nonprofit group opposes the creation of an exchange-traded fund backed by the precious metal amid concerns such an investment product could make silver too expensive or illiquid in the world market.
The Silver Users Association is especially concerned that a new ETF might threaten jobs in the silver industry, as it would require large amounts of metal to be held in vaults and out of reach of the marketplace, a spokesman said on Wednesday.
Commodity ETFs are designed to track the price of a specific product or basket of goods, and in the case of silver, one likely would be backed by physically stored metal.
"The concern we have is about jobs," Paul Miller of the SUA told Reuters. "That concerns our members greatly."
The SUA sees the removal of large quantities of physical silver having a negative impact on industry-specific employment as well as the overall economy, both through job losses and inflation, it said.
The organization has stated it supports the buying and selling of silver as an investment in general, but it does not endorse a silver ETF because of the potential liquidity problems it would create.
"The SUA urges the SEC (U.S. Securities and Exchange Commission) to take these issues into consideration before it decides whether or not to issue a silver ETF," it said in a recent newsletter.
Barclays Global Investors, the asset management arm of Barclays Plc (BARC.L: Quote, Profile, Research), filed a registration in June seeking regulatory approval for a new silver ETF.
The trust will be backed by silver held in England initially, and possibly at other locations down the road.
Gold ETFs have gained popularity in the recent commodity bull markets as investors were attracted to an alternate form of gold investment, aside from mining shares, options, futures and actual gold bullion.
In total, SUA said in the newsletter, the various gold ETFs have contributed to 250 tons of gold being purchased in the open market at a value of about $3.4 billion.
The SUA was established in 1947 to represent the interests of companies that make, sell and distribute products and services related to silver. Members include fabricators, manufacturers and other consumers as well as financial institutions and precious metals firms. |
