Silver ETFs: Why Wild Premiums and Discounts Amid Price Swings?

• Silver ETFs in India often trade at significant premiums or discounts to their underlying asset's price due to retail demand and domestic supply dynamics.
• The ETF's Net Asset Value (NAV) can diverge from its indicative NAV (iNAV), silver futures, and spot prices, especially during high demand periods.
• Physical silver shortages and the need for ETFs to acquire the underlying asset for unit creation can lead to price distortions.
• Experts note that these price distortions are usually short-lived, with prices tending to revert to the underlying instrument's movement.
• Investors are advised to consider Silver ETFs for diversification, with some experts suggesting holding existing positions due to strong drivers, while others anticipate further correction.

Why It Matters: Silver ETFs in India experience wild premiums/discounts due to demand-supply imbalances and physical silver dynamics.