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Buying Gold: Physical Vs ETFs

edited February 16 in Fund Discussions

Buying Gold: Physical Vs ETFs


/Gold has been valued as a currency, commodity and investment for thousands of years, and is popular among today’s investors because it can be used as a hedge against currency devaluation, inflation, or deflation, and due to its ability to provide a “safe haven” during times of economic uncertainty./

Just go to the nearest gold billions and buy ur physical golds


  • @johnN - sure if you just want to 'speculate' that someone will pay more for it than you did or you like shiny things, collect coins, use it for gifts. I think the better way to 'invest' however is by investing in companies that produce goods and services and the sales and profits that go with them like the miners and so forth. To each their own.
  • edited February 16
    Hi sir @Mark.... probably speculations and maybe a colleague at work just like rono had many physical gold bars and coins, he states he like to look at them time to time and bring to nearby bullions to trade...another colleague has lots old guns pistols from WWII (Japanese german) he says will go in 10 yrs but we never know

    Probably good to have all above_ gold bullions /gold etf /bonds stocks funds /real estates +reits
  • I've always thought the PM/gold miner funds were a way to speculate, not to invest long term, but that bias is likely because I've been burned in the past. I've sworn off that group forever. I guess you could say the same for gold ETFs but they are a much tamer play, which is why I bought the ETF IAU back in Dec. '18 and have added as the trend-up persists.

    For me gold has been a bet on economic and political uncertainty which I think will play out to even a greater extent for the next few years if not the next decade.
  • As to buying gold bullion, in my example; non-numismatic, as with American Gold Eagle or Canadian Maple Leaf, 1 oz.

    One of the lowest cost Canadian Maple Leaf 1 oz, .999 bullion coins that I may purchase today (Feb. 16, 2020) has a 4.29% premium over the gold spot price. With the assumption that one may anticipate a 2-5% premium to buy and the same going into the sell side; a bullion purchase should have these numbers in mind.

    To me, the equivalent is a load to buy/sell a mutual fund/etf.

    Assuming whatever performance with a fund over a 10 year or whatever period, and using the above percentage range for bullion buy/sell using 4% for easy numbers; one would be buying a fund at a 4% premium and selling at a 4% discount. Front and back load city, eh?

    Have a good remainder.

  • edited February 16
    Sorry @catch, I'm missing what your point or conclusion is on owning physical gold vs an ETF. There is no load on the ETF (a .25% expense ratio though on IAU) but as you point out there is a sales charge in and out of physical gold. Is that your point that the return is less for physical?
  • @MikeM
    Yes, that one will likely encounter a premium on the buy and sell side when dealing with physical bullion.

    Note to self: don't write while short of time.
  • A EFT will provide liquidity and little premium/discount compared to the physical metal.
    Liquidity should not be downplayed.
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