Which Gold ETF?
Discussion
I’m currently researching ETFs that track the price of gold. There aren’t loads of funds to choose from and they all appear to be fairly similar so it isn’t easy to discount one in favour of another. For those of you invested in gold ETFs, which fund are you in and why did you choose it?
Well let's face it you're never going down the bank asking for your share of a gold ETF and if physical ownership is your thing then ultimately buy physical gold not an ETF.
But if you're buying an ETF I'd keep it simple and go with the "hopefully too big to fail plus it's physical and audited" providers
But if you're buying an ETF I'd keep it simple and go with the "hopefully too big to fail plus it's physical and audited" providers
I don’t want to send the thread off on a tangent but I do have very strong reasons for it to be at least backed by physical gold. But the point you make is sound - a gold bar in a vault is probably safer than some data on a server somewhere. I need to have a chat with the gold bar people (don’t I sound rich? 🤑 - if only).
I thought more people would respond to this. I find that interesting.
I thought more people would respond to this. I find that interesting.
SonicHedgeHog said:
I don’t want to send the thread off on a tangent but I do have very strong reasons for it to be at least backed by physical gold. But the point you make is sound - a gold bar in a vault is probably safer than some data on a server somewhere. I need to have a chat with the gold bar people (don’t I sound rich? ? - if only).
I thought more people would respond to this. I find that interesting.
Most data on servers lives in the real world somewhere. Iron Mountain probably. I thought more people would respond to this. I find that interesting.
OP if you research the funds prospectus you can see the risks involved (forced redemption, insurance/loss risks)
As Gold tends to be a sort of safety diversifier, that these prospectus's state in the small print you can't redeem for physical Gold removes,for me, part of their utility.
Research "Unallocated gold" (it's a form of gold ownership where you don't own specific physical gold bars or coins, but rather a claim on a pool of gold held by a bank or financial institution. It's essentially a bookkeeping entry, where you are a creditor of the institution, entitled to the equivalent value of gold, but not to specific, identifiable gold)
This leads to the situation where 'paper' claims on Gold exceed the Gold available, a bit like allocated money in your current account, it's all there but there isn't the cash to give everyone, bank run/gold run
To just track the gold price it's fine but it's a world away from personal ownership.
I'd at least advise you to split between some and some, if you get to the point of thinking some Gold is worth having, go the whole hog and actually have it, not a paper derivative that whilst fully backed by Gold (which sounds great right?) isn't actually available to you in the extreme scenario it might perfrom best in (which defeats the object?)
possession is 9/10th's of the law and you don't own it, the ETF doesn't own it even, the custodians do...........and who are the custodians, well banks like HSBC or JP Morgan etc.......makes you think
As Gold tends to be a sort of safety diversifier, that these prospectus's state in the small print you can't redeem for physical Gold removes,for me, part of their utility.
Research "Unallocated gold" (it's a form of gold ownership where you don't own specific physical gold bars or coins, but rather a claim on a pool of gold held by a bank or financial institution. It's essentially a bookkeeping entry, where you are a creditor of the institution, entitled to the equivalent value of gold, but not to specific, identifiable gold)
This leads to the situation where 'paper' claims on Gold exceed the Gold available, a bit like allocated money in your current account, it's all there but there isn't the cash to give everyone, bank run/gold run
To just track the gold price it's fine but it's a world away from personal ownership.
I'd at least advise you to split between some and some, if you get to the point of thinking some Gold is worth having, go the whole hog and actually have it, not a paper derivative that whilst fully backed by Gold (which sounds great right?) isn't actually available to you in the extreme scenario it might perfrom best in (which defeats the object?)
possession is 9/10th's of the law and you don't own it, the ETF doesn't own it even, the custodians do...........and who are the custodians, well banks like HSBC or JP Morgan etc.......makes you think
Great post Scootersp. I’m doing a lot of reading at the moment and gold forms part of the master investment plan. It’s just tricky to find really good articles about how to go about it. I understand the general theory but don’t want to get caught out and find someone says “yeah, but….” Going to make a few calls this week and try and understand more detail. Cheers
SonicHedgeHog said:
I don’t want to send the thread off on a tangent but I do have very strong reasons for it to be at least backed by physical gold. But the point you make is sound - a gold bar in a vault is probably safer than some data on a server somewhere. I need to have a chat with the gold bar people (don’t I sound rich? ? - if only).
I thought more people would respond to this. I find that interesting.
I looked into this year's back. If held by an institution you weren't allowed to visit your gold, and you couldn't take it off site for the weekend to sit in a chair of gold bars.I thought more people would respond to this. I find that interesting.
If you were allowed to visit it, they pointed at a pile and said "that's yours", how would you know they didn't show the same pile to the next person?
I've used Bullionvault before which allocates actual bank vault gold bullion. Can't remember what the fees were: something like 0.5-1% to buy and then the same again to sell and the same again for annual fee.
However it was very expensive to take the gold out but it was possible.
I think if I was to invest again then I would go the etf route.
However it was very expensive to take the gold out but it was possible.
I think if I was to invest again then I would go the etf route.
b
hstewie said:
hstewie said: Remember gold is typically used as a store of value as opposed to an investment.
So the "doomsday" scenario that you seem to think gold would cover might not actually be super useful depending on how the rest of your future works out.
True, true. However, I’m at a stage of life where security is becoming more important than maximum returns. I have done enough reading to be confident that the world is going to go a certain way and that the ‘gold play’ is the right way for me to go with a chunk of my pension. If I’m wrong the downside is very unlikely to be bad, just less good than it might have been. If I’m right then my hedge will pay off. I just need to make sure I hedge it in the right way. Hence starting the thread and being grateful for different opinions.So the "doomsday" scenario that you seem to think gold would cover might not actually be super useful depending on how the rest of your future works out.
The people I know (professional investors), when they hold gold, they will literally buy physical gold (not in large chunks obviously) and keep it in a safe. I think these were also CGT exempt type golds, not sure I'm not an expert, but it is supposed to provide good hedge. There are other factors why Gold actually where it is now, and it is complex but not a bubble -imho-
SonicHedgeHog said:
Blue_star said:
Out of interest - why are you looking at gold tracker?
Let’s just say I feel my retirement plans need some allowance for the Doomsday scenario.Just one thing to throw there - in addition to gold etfs there is also options for finds that track various derivatives of precious metals - in other words you get exposure to silver/paladium/ whatever in addition to gold. For example wisdom tree on vanguard.
Secondly, you can do the same with multiple commodities in addition to gold like oil, natural gas, soybean. For example on hargreaves lansdown the CT ENHANCED COMMODITIES.
Just giving you some options if you want to play with 5% of portfolio. Personally, I havent researched funds, just wanted to give you some examples in case you want to research and new for you. So I dont recomend or have personally invested as of today. In fact sheets you can find distributions or we can provide here just let me know
In the end of the day you dont need to be right, you just need to figure out what other would put their money in. Good luck and let us know what you decide.
Also you know you can buy physical bars, right?
possibly interesting facts.
All the gold mined in history equates to approx 1oz per person on Earth
All silver mined in history about 8 oz (probably more like 4 as a lot of silver is consumed and so is back in the ground/landfill)
Thousands of tonnes of gold are held by countries/central banks around the world and so what is available to individuals is eveb less than stated above.
US dimes used to be approx 70% silver, to make just 1 trillion dollars worth of these type of part silver dimes would take...........over x10 the total amount of silver mined in history.
SIlver and Gold have gone up with the money supply which has gone a bit exponential since 2008, billions 'fixed' things back then in the crisis, today trillions needed every year to keep the US ticking over?
ETF vs physical, I can't find data so far on this but I suspect the ratio of ETF buyers to physical ones is still quite high and I also think because of this the price remains lower than it might otherwise.
https://intelligent-partnership.com/paper-gold-vol...
"Over the decades, the derivative market for gold has grown exponentially. What began as a means to finance new gold production has morphed into an untenably leveraged marketplace."
"By August 2011, 36 of the 56 Full LBMA trading members submitted returns for the new survey, and the results were rather shocking. Quietly, the size of the “paper” gold market had grown to monstrous proportions – successfully creating a tsunami of paper gold flow. In fact, according to the Q1 2011 LBMA Liquidity survey, over 173,713,000 ounces or 5,400 tons of “paper gold” per day (more than 2 year annual physical production) turns over with only 2/3 of LBMA members reporting!
"Paper Gold is just like allocated, unambiguously owned physical bullion…until it’s not"
All the gold mined in history equates to approx 1oz per person on Earth
All silver mined in history about 8 oz (probably more like 4 as a lot of silver is consumed and so is back in the ground/landfill)
Thousands of tonnes of gold are held by countries/central banks around the world and so what is available to individuals is eveb less than stated above.
US dimes used to be approx 70% silver, to make just 1 trillion dollars worth of these type of part silver dimes would take...........over x10 the total amount of silver mined in history.
SIlver and Gold have gone up with the money supply which has gone a bit exponential since 2008, billions 'fixed' things back then in the crisis, today trillions needed every year to keep the US ticking over?
ETF vs physical, I can't find data so far on this but I suspect the ratio of ETF buyers to physical ones is still quite high and I also think because of this the price remains lower than it might otherwise.
https://intelligent-partnership.com/paper-gold-vol...
"Over the decades, the derivative market for gold has grown exponentially. What began as a means to finance new gold production has morphed into an untenably leveraged marketplace."
"By August 2011, 36 of the 56 Full LBMA trading members submitted returns for the new survey, and the results were rather shocking. Quietly, the size of the “paper” gold market had grown to monstrous proportions – successfully creating a tsunami of paper gold flow. In fact, according to the Q1 2011 LBMA Liquidity survey, over 173,713,000 ounces or 5,400 tons of “paper gold” per day (more than 2 year annual physical production) turns over with only 2/3 of LBMA members reporting!
"Paper Gold is just like allocated, unambiguously owned physical bullion…until it’s not"
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