Best way to invest in GOLD

cloud_dog

Edchalk, Gold has been discussed a number of times on this forum and there are a few quite good threads, one:

http://forums.moneysavingexpert.com/showthread.html?t=410631&highlight=canada

TDS wrote: »

I've read a lot of articles saying that buying actual gold rather than a fund etc is better, tho I can't remember what the arguments

The arguments wrt to why funds, ETF's, even Goldbullion may not be a good place to put your gold money is that the gold may not necessarilly be there.

A lot of these grouped investment holders partake in 'lending' the gold for short selling or whatever else. Normally the person borrowing the gold is usually able to buy back and return the figurative gold back to the fund but in a crisis will they be able to, and if they cant the fund will have simply lost your gold.

I know the above scenario is fairly high on the scary scale but:

1. People tend to invest in gold because of finacial uncertainty
2. Should a gold spike occur (i.e. 1980) the borrowing people may have to close their position because of margin calls etc

I know all the above is hypothesis but these are the reasons.

If you do want to go via a fund/bullion route you need to ensure they gurantee not to lend the bullion out.

beingjdc wrote: »

I'm not a financial adviser, but I'd say the last thing you want to do is stay invested in something with no yield for that long

A number of people make this observation but I dont buy in to it atm (and there is a difference atm). They are quite correct that gold (bullion) does not provide a yield but people often miss the point about why being in gold at times adds value (and that is the key word - value).

A stock, or similar may provide a yield but if the purchasing power of the yielded value is significantly devalued (money supply / inflation etc) then what value has it acutally provided. This why people go for bullion (gold).

Me (as mentioned a number of times in other threads) have some assets in gold and silver via Central Fund of Canada (https://www.centralfund.com) which holds a near 50/50 split between the two, has a stated mandate never to loan bullion, the bullion is accounted and reported on twice a year, and............. because of its structure I can hold it in an ISA. :T

Trades on TSX and NYSE btw, can buy through SelfTrade. One downside to be aware of is that it can trade at a premium to its NAV, but you would have to pay a premium for a fund or even bullion so that aspect is pretty mute.

FYI, they have a sister fund that only holds gold.

cloud_dog

Note: am positive on resources and buy in to the super-cycle concept