LONDON SILVER ETF LESS PHYSICAL Tuesday, March 07, 2006 - FreeMarketNews.com
The London Stock Exchange (LSE) has announced that it will begin trading a silver tracking exchange traded fund (ETF) next month, according to the Financial Times. The security will be the first ETF to track silver. The LSE is already trading an oil tracking ETF.
The LSE received approval to begin trading the silver ETF from the British Financial Services Authority. The SEC is still considering the launch of the Barclays silver backed ETF to be traded in the U.S. The London based ETF has not received the same attention as the U.S. based ETF because the Barclays ETF will be backed by physical silver and the London-based ETF will not. Most silver analysts believe that if the Barclays ETF is approved, it will absorb silver stockpiles and increase demand for the metal.
While some speculators may welcome the LSE silver ETF as trading vehicle, critics argue that since it isn’t backed by the physical metal it is simply a derivative of the physical market.
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