Cheapest Tracker of the Price of gold

sidneyyoungblood

Can anyone recommend the cheapest way of investing in Gold within a S&S ISA which tracks the actual price . 

Was going to buy some physical gold around Christmas but put it off due to security concerns and it has gone up  around 10% in that time .. looking to add some divercity to my HSBC Global Dynamic tracker .

thanks

masonic

I've used SGLN in the past. iShares and pretty cheap.

sidneyyoungblood

masonic said:

I've used SGLN in the past. iShares and pretty cheap.

Thanks , will look into it .. was hoping to get the closest to owning gold without the stress of storing it . 

kempiejon

I use WisdomTree Physical Gold Individual Securities ETC LON:PHAU in my SIPP. Some etf/etc hold derivitatives, I avoided them. Tradable in whatever size amonts you need, no storage, security etc.

sidneyyoungblood

came across this article about the dangers of a ETF ... is it a scare tactic to make you buy  physical gold rather than an fund ?

The Risks Of A Gold ETF | BullionByPost

There current prices of a sovereign are 

  Buy £611.50

sell £556.21

is this normal when selling ( not just bullionbypost ) ?

Labtebricolist

Invesco SGLP (the accumulation version) for me.  I keep a very small % allocation in my pension.

It isn’t totally surprising that a physical gold trading firm would argue that physical gold is better than a gold ETF.  Personally I found their article explaining why to be unconvincing- it boiled down to an argument about counterparty risk, the answer to which is to make sure your ETF has a high market cap and is backed by physical gold, not replicated.  In the case of SGLP, in the unlikely event that Invesco failed, the ETF is a separate company that would retain its value for holders.  Management of the fund would doubtless get moved to another firm in the aftermath.

It is normal for there to be a spread between buy/sell prices.  If you absolutely must own the physical stuff, you should also think about where you’re storing your hoard and how much it will cost to insure.

dunstonh

sidneyyoungblood said:

came across this article about the dangers of a ETF ... is it a scare tactic to make you buy  physical gold rather than an fund ?

The Risks Of A Gold ETF | BullionByPost

There current prices of a sovereign are 

  Buy £611.50

sell £556.21

is this normal when selling ( not just bullionbypost ) ?

A good example of a biased article.   

aroominyork

masonic said:

I've used SGLN in the past. iShares and pretty cheap.

The OP wants to track the price of gold, so should presumably use the (less cheap) hedged version SGLS.

PS  Is owning bullion by definition unhedged, if the UK price is based on a forex calculation of the USD price of gold? Would the price of gold rise even more if it's priced in a weakening currency, i.e. if gold becomes the only safe haven?

noclaf

I use SGLN, cheap n cheerful and around 17% up since I bought in albeit a very small proportion of my ISA.

wmb194

sidneyyoungblood said:

came across this article about the dangers of a ETF ... is it a scare tactic to make you buy  physical gold rather than an fund ?

The Risks Of A Gold ETF | BullionByPost

There current prices of a sovereign are 

  Buy £611.50

sell £556.21

is this normal when selling ( not just bullionbypost ) ?

Why are you worried about iShares (Blackrock)? Yes, bid/offer spreads are normal, plus you have the risk inherent in owning physical gold (physical anything). Exchange traded securities will always be cheaper.

masonic

aroominyork said:

masonic said:

I've used SGLN in the past. iShares and pretty cheap.

The OP wants to track the price of gold, so should presumably use the (less cheap) hedged version SGLS.

PS  Is owning bullion by definition unhedged, if the UK price is based on a forex calculation of the USD price of gold? Would the price of gold rise even more if it's priced in a weakening currency, i.e. if gold becomes the only safe haven?

I don't understand why you would think that. 

If I want to track the price of gold, I'd go unhedged, so my units will always correspond to a specific quantity of physical gold. When I sell my holding, I'd always be able to buy the same amount of physical gold with the proceeds (less fees).

If I wanted to generate an artificial return based on the percentage change in dollar gold price, but receive this percentage return in GBP (for some strange reason) then I'd go for hedged.

Then if the gold price stays $3k, but the pound weakens sending the price from £2.5k to £3k, my unhedged gold ETF would holding it's value (rising 20% in GBP terms), whereas the hedged version would be worth 17% less (as its price in GBP would still be based on £2.5k). Selling the hedged fund and using the proceeds to buy some gold coins would result in a 17% loss.