The move in silver has been amazing, but something else has been even more amazing. Silver miners have selectively moved in a manner much more than the metal itself. The move in the Global X Silver Miners ETF (NYSEMKT: SIL) has ben dwarfed by the move in Silver Wheaton Corp. (NYSE: SLW). If you look at the chart below the ratio is almost 1.2 as it stands now in the price of SLW shares versus the iShares Silver Trust (NYSEMKT: SLV) ETF. While the number rarely gets this wide, it has gotten even widen in the past.

The Silver Institute has the demand in silver off the map with holdings at or near investor record levels. The report said that investors have purchased more than 32 million ounces of silver through silver-backed exchange-traded products so far this year, and now the total ETF-holdings total more than 608 million ounces with a value of $20.5 billion through September 15. The 20% return in silver has also helped, but the demand growth has fueled this gain also.

The Silver Institute said that this is also fueled by “a desire by investors to diversify their portfolios with hard assets, the diminished value of key currencies and continued global economic uncertainty.”

With the Silver Wheaton versus SLV ratio at almost 1.2 (1.197 now), we took a look a several other extremes on the Ycharts chart below:

• 1.29 in March 2011
• 1.29 in Dec 2010
• 1.37 earlier in December 2010

Another strong situation is that Hecla Mining Company (NYSE: HL) has even outperformed Silver Wheaton in the last month with gains of 35% versus about 23%. Still, Hecla remains a turnaround situation after mine issues pounded the stock earlier this year.

The price-ratio of Silver Wheat to the Silver ETF is getting to well above-normal levels. That being said, you can see that the ratio has reached even more extreme measures.

JON C. OGG

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