Any ETF specialists on board?

[Cashboy]

I came accross this thread searching for threads on gold.

I am no expert but I would advise anyone with ETF's in Gold to cash them in and buy real Gold and put it in your Safe Deposit Box. I have always said that.

These ETFs in Gold (and probably any other commodity) appear to me to be nothing more than IOU notes for the exchange of cash in effect.

I also believe that there are a pile more notes for actual gold in the world.

What happens if everybody buys gold and the price of gold shoots up and everyone called in their ETF's and they don't have gold or the cash equivalent to the value of gold. I would expect the ETF business to go down the pan and I don't think they are even regulated from what I am reading and hearing.
http://www.cnbc.com/id/15840232?video=1597379286&play=1

I gather that these will be the next "Financial Instrument" to catch investors out.

[Macchiato]

I recently read, metal funds lagged far behind phys. price gains lately, mainly due to massive trades of futures instead of metal itself.
Hard to find any good investment

[Uncle GroOve]

	Quote:	Macchiato
	I recently read, metal funds lagged far behind phys. price gains lately, mainly due to massive trades of futures instead of metal itself. Hard to find any good investment

Let's all remember what happened in the eye of the '08 meltdown .
Gold plunged from $930 to $681/oz because the banking sector needed to liquidate their holdings to transform them into "cash", despite the catastrophic scenario that was unfolding (it then took 16 weeks to recover to $930 and a total of 51 weeks to surpass the previous $1'030 high watermark).
As much as it is counterintuitive, this risk always exists. A catalyst could be the whole Basel III hoopla (i.e. investment banks will need to reduce exposure, prop trading desks being shut down, etc).
Any liquidation would eventually force the hands of all those who have purchased physical bullion (AND futures, AND ETFs, AND hedge funds) on a collateralized basis (treasuries, lines of credit, etc).

Just keep this in mind when you're heading to the bank to exchange your paper fiat money for metal, and be prepared (like always) to have a sufficiently long time horizon.

P.

[carver]

	Quote:	Cashboy
	I came accross this thread searching for threads on gold. I am no expert but I would advise anyone with ETF's in Gold to cash them in and buy real Gold and put it in your Safe Deposit Box. I have always said that. These ETFs in Gold (and probably any other commodity) appear to me to be nothing more than IOU notes for the exchange of cash in effect. I also believe that there are a pile more notes for actual gold in the world. What happens if everybody buys gold and the price of gold shoots up and everyone called in their ETF's and they don't have gold or the cash equivalent to the value of gold. I would expect the ETF business to go down the pan and I don't think they are even regulated from what I am reading and hearing. http://www.cnbc.com/id/15840232?video=1597379286&play=1 I gather that these will be the next "Financial Instrument" to catch investors out.

Spot on. The only gold ETFs that have - imo - any chance of being anywhere near 100% bullion backed would be Sprott, Central Fund of Canada and the ZKB. ETFs also decay through fees and rollover costs.

Goldmoney.com and bullionvault should be less dodgy than something like iShares, but they still have counterparty risk.

As cashboy says, physical bullion is far preferable. An allocated account with a top bullion dealer minimum, ideally your own safe deposit box.