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Trading Physical Gold As Easily As You Trade Stocks: Is Gold Becoming A Tradable Currency After All?
Reggie Middleton Interviews GBI: Gold Bullion International
I
interview a unique firm located on Wall Street that allows investors
(retail & institutional) to actually buy, sell, trade and store
physical gold in the investor's own name. This is part one of a four
part series. This is the introduction. Parts 2,3, and 4 (yet to be
posted) feature some very tough questions. BoomBustBlog interviews are
not pushovers or advertisements. You must be able to hold your own.
Enjoy!
This is a competitor to GBI: Gold Bullion International. Click the graphic to access site.
Click graphic to the left to enlarge!
| Click the graphic to the right to download the Sprott Physical Gold Trust Prospectus. Sprott is a BoomBustBlog client, but is not aware of this post (at least not yet) and there are no conflicts here. I may have him interviewed to enable him to counter assertions made in the interview above. |
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Anyone Free public versions that have
We feel the insurance industry may kick off events that cause volatility in the gold markets. See You Can Rest Assured That The Insurance Industries Are In For Guaranteed Losses … |
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JPM Public Excerpt of Forensic Analysis Subscription 2009-09-18 00:56:22 488.64 Kb
BNP Exposures - Free Public Download Version
Exposure of European insurers to PIIGS_051210The SPDRs GLD prospectus is available here. Highlights:
Gold exchange-traded product information sourced from Wikipedia, the free encyclopedia
Gold exchange-traded products are exchange-traded funds (ETFs), closed-end funds (CEFs) and exchange-traded notes (ETNs) that aim to track the price of gold. Gold exchange-traded products are traded on the major stock exchanges including Zurich, Mumbai, London, Paris and New York. As of 25 June 2010, physically backed funds held 2,062.6 tonnes of gold in total for private and institutional investors.[1] Each gold ETF, ETN, and CEF has a different structure outlined in its prospectus. Some such instruments do not necessarily hold physical gold. For example, gold ETNs generally track the price of gold using derivatives.
History
The
first gold exchange-traded product was Central Fund of Canada, a
closed-end fund founded in 1961. It later amended its articles of
incorporation in 1983 to provide investors with an exchange-tradable
product for ownership of gold and silver bullion. It has been listed on
the Toronto Stock Exchange since 1966 and the AMEX since 1986.[2]
The idea of a gold exchange-traded fund was first conceptualized by Benchmark Asset Management Company Private Ltd in India when they filed a proposal with the SEBI in May 2002. However it did not receive regulatory approval at first and was only launched later in March 2007.[3] The first gold ETF actually launched was Gold Bullion Securities, which listed 28 March 2003 on the Australian Stock Exchange. Graham Tuckwell, the founder and major shareholder of ETF Securities,
was behind the launch of this fund and enlisted N.M. Rothschild &
Sons (Australia) Ltd, Citibank and Deutsche Bank as market makers on the
ASX.[4]
Fees
Typically
a commission of 0.4% is charged for trading in gold ETFs and an annual
storage fee is charged. U.S. based transactions are a notable exception,
where most brokers charge only a small fraction of this commission
rate. The annual expenses of the fund such as storage, insurance, and
management fees are charged by selling a small amount of gold
represented by each share, so the amount of gold in each share will
gradually decline over time. In some countries, gold ETFs represent a
way to avoid the sales tax or the VAT which would apply to physical gold coins and bars.
In the United States, sales of a gold ETF are treated as sales of the underlying commodity and thus are taxed at the 28% capital gains rate for collectibles, rather than the rates applied to equity securities.[5]
Exchange-traded and closed-end funds
Central Fund of Canada and Central Gold Trust
The Central Fund of Canada (TSX: CEF.A, TSX: CEF.U, NYSE: CEF) and the Central Gold Trust (TSX: GTU.UN, TSX: GTU.U, NYSE: GTU) are closed-end funds headquartered in Calgary, Alberta, Canada,
mandated to keep the bulk of their net assets in precious metals, with a
small percentage of cash. The Central Fund of Canada holds primarily a
mix of gold and silver, while the Central Gold Trust holds primarily gold.
The custodian of the precious metals assets of both funds is the main Calgary branch of CIBC. Both funds are considered especially safe because of their published codes of governance and ethics, the Central Fund's history of operation since 1961, and the funds' simple prospectuses
which equate shares of the closed-end funds with real units of
ownership in the trusts. As of October 2009, the Central Fund of Canada
held 42.6 tonnes of gold and 2129.7 tonnes of silver in storage, and the
Central Gold Trust held 13.6 tons of gold in storage.
Claymore Gold Bullion ETF
In May 2009 Canadian-based Claymore Investments launched Claymore Gold Bullion ETF (TSX: CGL). As of November 2010 the fund held 10.4 tonnes in gold assets.[6]
Exchange Traded Gold
Several associated gold ETF's are grouped under the name Exchange Traded Gold.[7] The Exchange Traded Gold funds are sponsored by the World Gold Council, and as of June 2009 held 1,315.95 tonnes of gold in storage.[7] Exchange Traded Gold securities are listed on multiple exchanges worldwide by various ETF providers, including:
SPDR Gold Shares
SPDR Gold Shares marketed by State Street Global Markets LLC, an affiliate of State Street Global Advisors,
accounts for over 80 percent of the gold within the Exchange Traded
Gold group. As of 2009, SPDR Gold Shares is the largest and most liquid gold ETF on the market, and the second-largest exchange-traded fund (ETF) in the world.[8][9]
Stock market listings:
The SPDR Gold Trust ETF (GLD) holds a proportion of its gold in allocated form in London at HSBC, where it is audited twice a year by the company Inspectorate. GLD has been criticized by Catherine Austin Fitts and Carolyn Betts for its extremely complex structure and prospectus, possible conflict of interest in its relationships with HSBC and JPMorgan Chase which are believed to have large short positions in gold, and overall lack of transparency.[10] GLD has been compared with mortgage-backed securities and collateralized debt obligations.[10]
These problems with SPDR Gold Trust are not necessarily unique to the
fund, however as the dominant gold ETF the fund has received the most
extensive analysis.
Gold Bullion Securities, ETFS Physical Gold and ETFS Physical Swiss Gold
ETF Securities "Gold Bullion Securities" (previously marketed by Lyxor Asset Management) listings:
- Australia (ASX: GOL), Belgium, France (Euronext: GBS), Germany (FWB: GG9B), Italy, Netherlands and United Kingdom (LSE: GBS and LSE: GBSS)
Similar to Gold Bullion Securities, ETF Securities’ ETFS Physical Gold (LSE: PHAU) and ETFS Physical Swiss Gold (LSE: SGBS) are also backed by allocated gold bullion. They later launched ETFS Physical Swiss Gold Shares (NYSE: SGOL) and ETFS Physical Asian Gold Shares (NYSE: AGOL) on the New York Stock Exchange for US investors seeking geographical and custodian diversification.
ETF
Securities’ physical gold ETCs — ETFS Physical Gold (PHAU), ETFS
Physical Swiss Gold (SGBS) and Gold Bullion Securities (GBS) — are all
backed by “allocated” gold bars – uniquely identifiable bars which carry
no bank credit risk. The precious metal bars are held in trust in
London by the Custodian HSBC Bank USA N.A., the world’s leading
Custodian for ETCs. The metal held with the Custodian must conform to
the rules for Good Delivery
of the London Bullion Market Association (LBMA). Securities are only
issued once metal is confirmed as being deposited into the Company’s
bullion account with the Custodian. Consistent with allocated gold, no
precious metal is borrowed, loaned out nor does it earn any income.[citation needed]
Dubai Gold Securities and NewGold
- Dubai Gold Securities (Sharia compliant) (NASDAQ Dubai:GOLD)
- ABSA "NewGold" debentures (JSE: NewGold)
Goldist ETF
Goldist ETF (ticker symbol: GLDTR) was launched by Finansbank in September 2006 on the Istanbul Stock Exchange.[11]
iShares Gold Trust
The iShares Gold Trust was launched by iShares on 21 January 2005 and is listed on the New York Stock Exchange (NYSE: IAU) and Toronto Stock Exchange (TSX: IGT). As of July 29, 2010, the fund claimed to hold 90.88 tonnes
of gold in storage. According the prospectus, trading in the fund may
be suspended if COMEX gold trading is restricted or gold delivery is not
possible. Some writers have expressed doubts that iShares has
sufficient gold inventory to back its existing warehouse receipts.[12]
One of the main differences between iShares and SPDR Gold Trusts is
that iShares creates roughly 100 shares from every ounce of gold, versus
the 10 shares per ounce created by SPDR. This makes iShares more
accessible for day traders or small investors to play the gold market.[13]
Julius Baer Physical Gold Fund
In October 2008 Swiss & Global Asset Management (formerly Julius Baer Asset Management) launched JB Physical Gold Fund (SIX: JBGOCA, JBGOEA, JBGOUA, JBGOGA)
which invests in physical 12.5 kg gold bars (around 400 ounces). The
ETF has four unit classes traded in different currencies: CHF, EUR, USD and GBP.[14]
Precious Metals Bullion Trust
On August 14, 2009 Brompton Funds Management Limited launched Precious Metals Bullion Trust (TSX: PBU.UN).
The Fund invests in physical gold, silver and platinum bullion bars
which are stored on a fully allocated, insured and physically segregated
basis in Canada, in the treasury vaults of the Bank of Nova Scotia, a Canadian Schedule 1 bank. PBU.UN publishes its “Good Delivery” standard bar holdings on a monthly basis on its website[15]
and units can be redeemed quarterly at Net Asset Value for cash with no
limitations. As the physical bullion held by the Fund is entirely
unencumbered, unitholders may also choose to redeem quarterly for whole
bars of physical gold, silver and platinum bullion (subject to minimum
redemption amounts).
Sprott Physical Gold Trust
Sprott
Asset Management launched the Sprott Physical Gold Trust as a
closed-end fund on February 26, 2010. It is traded on the NYSE Arca (NYSE: PHYS) and the Toronto Stock Exchange (TSX: PHY.U). The fund holds physical gold, stored at the Royal Canadian Mint.
PHYS publishes its inventory of Good Delivery gold bars on the web, and
(uniquely among gold ETFs) allows shares to be redeemed for whole bars.
As LBMA bars weigh between 350 and 430 troy ounces, physical redemption
is limited to such increments. Regardless, the provision for physical
redemption lends credibility to the fund's claim of holding unencumbered
physical gold, especially as of 2010 when funds such as SPDR Gold
Shares with elaborately structured holdings are under scrutiny. As of
June 2010, the Sprott Physical Gold Trust held 582,417 ounces of gold,
plus about $9 million of other assets.[16]
ZKB Gold ETF
The ZKB Gold ETF (SIX: ZGLD, ZGLDEU, ZGLDUS, ZGLDGB) was launched on 15 March 2006 by Zürcher Kantonalbank.
The fund invests exclusively in physical 12.5 kg gold bars (around 400
ounces). The ETF has four unit classes traded in different currencies: CHF, EUR, USD and GBP.[17]
Exchange-traded certificates
Source Physical Gold P-ETC
Source,
the specialist provider of exchange traded products partnered with BofA
Merrill Lynch, Goldman Sachs, JP Morgan, Morgan Stanley and Nomura,
listed the Source Physical Gold P-ETC (SGLD) on the London Stock Exchange in June 2009.[18] The product has also been cross-listed on the SIX Swiss Exchange (SIX)in November 2010.[19]
SGLD trades in US dollars and has raised over US$1.1 billion in assets to date.[20]
Each
Gold P-ETC is a certificate which is secured by gold bullion held in
J.P. Morgan Chase Bank’s London vaults. The vast majority of gold
bullion is held in allocated gold bars. Any residual value that cannot
be split into standard gold bars will be put into unallocated gold. This
is placed in a segregated account with J.P. Morgan Chase Bank acting as
Custodian and Deutsche Bank as Trustee. The investment return is
achieved by holding gold bullion which is valued daily at the London PM
fixing price.[21]
One
of the main advantages of this product is the annual management fee,
which at 0.29% is considerably lower than comparable competing products.
SGLD has achieved UK reporting status, which provides for preferential
tax treatment in the United Kingdom.[22]
db Physical Gold ETC
db Physical Gold ETC (SIX: XGLD, LSE: XGLD, FWB: XAD5) was launched by Deutsche Bank in July 2010.[23]
Nomura Gold-Price-Linked ETF
On 10 August 2007, Nomura Asset Management launched the Gold-Price-Linked ETF (code "1328") on the Osaka Securities Exchange, Japan. Shares are sold in 1 gram gold units, with a minimum purchase of ten units. The fund is not backed by physical gold but by bonds traded in London which are linked to the price of gold.
RBS Physical Gold ETC
Royal Bank of Scotland N.V. launched RBS Physical Gold ETC (FWB: XOB1) in April 2010.[24]
Xetra-Gold
Xetra-Gold (FWB: 4GLD) was launched by Deutsche Börse Commodities in December 2007.[25]
Hybrid products
Hybrid
products hold mostly physical gold, but also hold other financial
instruments such as gold futures, bonds or money market funds.
Benchmark Gold BeES
On 19 March 2007 Benchmark Asset Management Company Private Ltd, a Mumbai-based mutual fund house, launched Gold BeES (NSE: GOLDBEES) on the National Stock Exchange of India.
The name is short for "Gold Benchmark Exchange-traded Scheme." Shares
are sold in approximately 1 gram gold units. The scheme's assets are
90-100% physical gold, and up to 10% money market instruments, securitised debts (up to 5%), and bonds.[26]
UTI Gold Exchange Traded Fund
On 17 April 2007 UTI Mutual Fund listed Gold Exchange Traded Fund (NSE: GOLDSHARE) on the National Stock Exchange of India.
The fund states that its objective is "to provide investment returns
that, before expenses, closely correspond to the performance and yield
of the gold prices or gold related instruments."[27]
Every unit of UTI Gold Exchange Traded Fund approximately represents
one gram of pure gold. Units allotted under the scheme will be credited
to investors’ demat accounts.[28]
Index-tracking products
ETFS Gold
In September 2006 ETF Securities launched ETFS Gold (LSE: BULL) which tracks the DJ-AIG Gold Sub-Index.
IDBI Gold ETF
IDBI
Mutual Fund has launched IDBI Gold Exchange Traded Fund, an open ended
Gold Exchange Traded Scheme. The investment objective of the scheme is
invest in physical Gold and Gold related instruments with the objective
to replicate the performance of Gold in domestic prices. The ETF will
adopt a passive investment strategy and will seek to achieve the
investment objective by minimizing the tracking error between the Fund
and the underlying asset . The New Fund Offer (NFO) open for
subscription from October 19 and close on November 2, 2011. The New Fund
Offer price is Rs 100 for cash at a premium equivalent to the
difference between the allotment price and face value of 100/- each.
Allotment price would be approximately equal to the price of 1 gram of
Gold. The Scheme does not offer any Plans for investment. The minimum
investment amount is 10,000 and in multiples of Rs. 1 thereafter. Entry
and exit load charge will be nil for the scheme. The scheme will invest
95% to 100% of assets in gold and gold related instruments and upto 5%
of assets in debt and money market instruments. The Benchmark Index will
be domestic price of physical Gold
PowerShares DB Gold ETF and ETNs (PowerShares/Deutsche Bank)
Tracks the performance of certain index moves inside the Deutsche Bank Liquid Commodity Index - Optimum Yield Gold [1]. ETNs are exchange-traded notes, which differ from exchange-traded funds (ETFs).
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my thoughts exactly, "a vault somewhere". My bullion is in my vault, under my control, responsibility, under my protection, etc. Even if this "vault somewhere" is legit, there is no bloody guarantee that if SHTF that the gov't, hofjuden banks and their families, etc. will not get their grubby fingers on it for the sake of "greater good" or "national security".
for realz just look at what Corzine was willing to do to get his grubby little hands on fiat bits of worthless paper/electronic digits. Imagine what these cock suckers will do to get their hands on real hard money when the time is just right. If you can't touch it, it's NOT yours.. period.
Sounds like a start up; don't trust start ups, sales guy looks really young; don't trust Indians either (worked with several in start-ups) probably backed by a couple of banks who're their partners and some seed money from the Indian guy's father (cause he can't get a real job)
The thing is, these people are nothing more than the same thieves pimping stocks over the phone; and when it comes to gold; buy physical yourself, and store it yourself... and if you're scared to do that... then just keep your money in cash, cause you're a retard (I know ots of people of live in fear, it's how they keep you inslaved).
truth is, no body will come and rob you if they do not know you have it; and you put it in a spot nobody knows, cares about...
like in the woods, in a lake, buried in the back yard; paint you kilo bars different colors with paint and put them on the side table buy the plants... as stupid art work; etc.
trust know one, not even your own family members...like your wife, teenage son, etc. everyone knows gold is real money real valuable, real wealth; and when the SHTF, people will drool, lust after it, cause it will be an escape out of total poverty/misery.
a fool and his money soon part.
Don't trust anyone but gold in hand.
The guy is a Sikh, not neccessarily an Indian. Got ignorance?