Reuters reports that Julius Baer gold ETF holdings rise 18 pct.
(emphasis mine) [my comment]
Julius Baer gold ETF holdings rise 18 pct
Mon Mar 9, 2009 11:35am EDT
LONDON, March 9 (Reuters) - Holdings of Julius Baer's (BAER.VX) gold-backed exchange traded fund rose 109,000 ounces or 18 percent last week, the bank said in a weekly statement.
The amount of gold the fund holds to back its exchange-traded securities climbed to a record 728,575 ounces by March 6 from 619,575 ounces the previous Friday, it said.
The rise in Julius Baer's ETF holdings contrast with those of the world's largest gold-backed ETF, the SPDR Gold Trust GLD, which declined for the first time since early January on Friday. [I have been waiting for this.]
Investors are buying into gold as a safe store of value amid volatility in other asset classes. As gold ETFs are backed by physical stocks of a precious metal, they are marketed as lower in counterparty risk than other investments. [Depends on the gold ]
My reaction: The growing holdings of redeemable Swiss gold ETFs stands in stark contrast to the falling holdings of GLD, and it is sign that investors are differentiating between physical and paper gold.
Physical and Paper Gold: Julius Baer Physical Gold VS GLD
Last November, when Julius Baer started its physical gold fund, I highlighted it as an attractive investment and a safer alternative to GLD:
Julius Baer Physical Gold Funds are attractive for several reasons. First, they are located in Switzerland outside the US. Second, they invest strictly in physical gold. Finally, unlike other ETF like GLD, Julius Baer Physical Gold Funds have the option of redeeming shares for physical gold. The funds started trading on October 31.
And three weeks ago, I wrote about the risks in owning GLD
Conclusion: The central point to owning gold is safety, and GLD is not safe. The only gold ETFs I recommend are those in Switzerland which are redeemable for physical gold.
Last week's changes in gold holding show that investors are focusing more on the counterparty risks of different gold investments.
Why most gold ETFs are paper gold
The reason most gold ETFs (excepting Julius Baer Physical Gold and ZKB gold ETF) should be considered unsafe paper gold are their custodian. HSBC is the Custodian for approximately 80% of all physically-backed ETCs globally. HSBC is also the commercial bank with the second largest short position in gold:
Furthermore, HSBC's vaults are located in London, which is very problematic from the perspective of keeping gold safe. Unlike the cover manipulations of other nations (ie: the US), England has been blatantly and openly suppressing gold prices. The UK's 1999 gold sales are the perfect example of this:
The decision to pre-announce its gold sales in 1999 shows that UK was determined to either:
A) Lose money
B) Suppress the price of gold.
Storing gold with a custodian who is heavily short the metal in a nation that is actively manipulating/suppressing gold prices is a recipe for disaster.
A mountain of paper gold waiting to unwind:
Conclusion: If the differentiation between physical and paper gold continues and becomes a trend, then the world is near the end of gold price manipulation. Nations (ie: the US and Britain) and financial institutions (ie: HSBC and JPMorgan) who are on the short side of gold will soon be revealed to be insolvent.
Foarte interesat subiectul postat de tine, m-am uitat pe blogul tau si imi place ce am vazu am sa mai revin cu siguranta.
O zi buna!
translation please
how do you invest in BAER.VX?
No gold ETFs are safe. Not even ones that are redeemable in gold.. at least not the way the majority of investors buy them.
If your broker is allowed to lend your holdings out to short sellers then you probably don't have the actual ETF units in your brokerage account. What you actually have is a contract with some hedge fund to pay you an ETF share.
Most people do buy shares (and ETF units) in this manner so no ETFs can be considered 'safe' (because you probably don't really have them) even if they only invest in physical gold, outside the US and make their shares redeemable in physical gold.
Robert:
That is basically my conclusion. Best way to own gold is buy coins, store them in your house, and then buy insurance. Just like a wedding ring. I just didn't that answer, I really wished there was some way to do it safely and not keep it in your house.
There is of course goldmoney.com, see http://globaleconomicanalysis.blogspot.com/2008/06/minyan-mailbag-how-safe-is-my-gold.html
BAER.VX is the ticker of Julius Baer Bank AG (these shares are actually lower in last months) not this gold ETF. There are actually 6 gold EFTs from this bank (in USD, EUR, CHF) and redeemable or not redeemable.
Please correct by looking on Swiss Stock Exchange.
I was looking into Digital Gold Money possibilities, but then:
e-gold was raided and shut down by US gov, the story about e-bullion is really nasty; and Liberty Reserve warehouses was raided by FBI, no charges laid, so they have been taken as "unlawful combatants" in this ever lasting popul game.
GoldMoney is operating from UK, and usually poms are lagging behind (9/11-07/07 lag ;)
Seems like gardening of gold is the only option left for us.
In my previous post I referred to Liberty Dollar. Read current
http://en.wikipedia.org/wiki/Liberty_dollar
to see how excited crowds can be if a currency fully backed by commodity (in his case silver) with digital gold money (to be precise: cryptomoney) introduced.
I am not in US but the history of this wikipedia entry indicate that is something fishy is going in US legal system and politics (claims of Ron Paul support from one side and evidence of wiki tempering and bias from the other side).
Anyone ever checked other commodity ETFS (e.g. wheat, copper) for "manipulation"?
I believe it is quite normal practice for the amounts sold through ETFS not to match physical stock. As does Jim Rogers.
Not that I spoke to Mr. Rogers in person, and I haven't been able to validate this interview, but here is Jim (written, no video) saying ETFs are always "manipulated":
http://www.gold-eagle.com/editorials_08/bevan031309.html