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CEF (Central Fund of Canada) Depreciating?

edited April 2011 in Fund Discussions
I'm curious as to why this fund's price is going down while the spot price of gold and silver continue to escalate? Any ideas? Thanks.


  • edited November 2011
  • You almost have to be a full time trader to watch the spread to come out ahead . On the other hand there probably are people who have mastered the the trade and are making a good buck.
    For me I am really looking to get in a load fund without the load. An example is GIM the CEF of Templeton Global Bond. I believed I paid a 5% premium but it should work out if I sell at a premiumatleast 5%. I also like PFBDX the unhedged Pimco Foreign Bond which I hold in my income portfolio

    Burt S.
  • looks like many professionals and individuals are shorting gold and especially silver and calling for the market top. I heard SLV is out of shares to short (or too expensive) and they are now moving to CEF (which invests a large chunk in silver). It did loose its historical 8-9% premium and moved to a discount. for those building positions, it's might be a good time to add. I did pay a 5% premium back in May 2010 -- up 65% since though. looking to the end of may to get my long-term cap gains. would re-enter when it drops. volatility is breathtaking - up/down 4-5%. no one should put significant share of their wealth into this thing.

  • Thanks for the comments as I've been scratching my head over CEF depreciating while spot pm's are appreciating. I've been in CEF since April 2010, so I'm happy with the returns thus far. But CEF has always gone up or down together with spot pm prices until recently. Bests.
  • Howdy,

    It's been happening quite often with mining shares (and therefore pm mutual funds) and indeed, all throughout this bull market, the miners have lagged bullion. This is expressed by the gold/XAU ratio which has recently jumped to over 7. It's been running around 6.5 for months and months. 4 is equilibrium with higher numbers a buy sign for mining shares relative to bullion. Under 4 is a buy sign for bullion.

    It would seem, that some of the newer futures trading rules coupled with some ongoing investigations are dampening the ability to short physical gold and silver. There is also a growning trend by some investors, to take delivery and each time someone does, it reduces the ability to short bullion.

    I was watching the ticker off and on this past Friday, on an up equity day, and saw gold skyrocket and silver stand pat while mining stocks got hammered. Oh really?

    And please don't think that I'm claiming some sort of conspiracy. Not hardly. Silver and to a lesser degree gold, has gone almost vertical and got frothy enough to warrant a pullback and consolidation. This sort of thing always generates speculative interest and an increase in short interest at this point is expected. Hell, I'd be concerned if there wasn't an increase in short interest.



  • Thanks Rono : )
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