» Topic: Trend towards physical Gold and is GLD risky?Bonner & Partners

Sunday, 21 January 2018

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Trend towards physical Gold and is GLD risky?

Welcome! Forums Gold and Commodities Investing Trend towards physical Gold and is GLD risky?

This topic contains 7 replies, has 7 voices, and was last updated by  STEVE D. 5 years, 2 months ago.

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    STEVE D.

    Bonner, his news letters by Agora, and Doug Casey usually seems to be somewhat in sync. But I’ve been seeing more articles about the risks of gold ETFs such as GLD. There are questions about whether they have all the gold necessary to back up the values. Casey just published an article about a shift from ETFs to physical gold. Yet the Bonner Family Office Portfolio is carrying GLD.
    I’ve done some shifting as well. But still have a significant portion of my gold exposure in GLD. Should we be trying to reduce gold ETF exposure to a bare minimum?


    JOHN G.

    Thank you for raising this question.. From my research I am concerned as well.. While GLD seems the easiest to trade on a short term basis, is it safe to hold.. The expenses also seem high.. Are there safer cheaper ETFs to hold. This may be an area of concern for other family members and was wondering if we could get a response from the investment manager.. Thank you John Givogre



    I trust SGOL more. No factual reason though other than hearsay.



    I am curious as to why the Sprott Physical Gold (PHYS), Sprott Physical Silver (PSLV), and Central Fund of Canada (CEF) are not mentioned in discussions of alternatives to physically held gold and silver. These are my favorites. Their holdings are audited annually and with the Sprott you can trade in your stock for physical metal if you have sufficient holdings. They usually trade at a small premium to net assest value and on occasions there have been larger deviations from NAV. CEF has on occasion traded at a discount to NAV. So if you are careful not to pay too large a premium, <5-7%, and plan to hold for the long term, I see these as an excellent alternative to SLV and GLD. If held for more than 1 year, profits are treated as long term capital gains. Are there any negatives that I am not aware of?



    Update: I just found that these funds have been mentioned in other conversations several months ago. My question about any negatives still remains.


    Emma Walsh

    Hi everyone, please see note in Rob’s September report regarding the shift to physical investment from ETFs. In particular, the two sections following sub-heading “Demand is rising”.

    Please feel free to get in touch or post further comments here in the Club Room.
    Emma Walsh
    Member Liaison



    Looking for the current value of the funds listed above, I came across an online argument valuing gold at $1100/oz by valuing it based “its equivalent in terms of currency in circulation”.


    While I follow his argument, I don’t have the background or knowledge of currencies valuations to know if there is any validity to the argument. I’d be interested in others comments on this valuation of gold.



    Germany is now auditing their gold and asking the New York Fed to send 150 tons(?) back to Germany. When one central bank is asking another to “show me the money”, to me it speaks volumes. I think the saying “where there is smoke there is fire” applies here. This suggest that there are concerns at the highest levels that physical gold is not being accounted for at a level that is completely above board. There is also alot of “smoke” around GLD. Why take a chance. Go to one of the options above. Another choice is the sister fund of CEF – which is GTU.

    As to the value of gold. The old saying was “an ounce of gold will always buy a good suit”. Guess it depends on what you think is a good suit – I would say $1000 – 1500 would not be out of line. The problem with the above valuation is that all the western countries are devaluing their currency at a tremendous rate. There is would seem to be some premium associated with that.

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