Which Gold ETF Would You Recommend Now?

Discussion of the Gold portion of the Permanent Portfolio

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Don
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Which Gold ETF Would You Recommend Now?

Post by Don » Fri Feb 14, 2020 5:45 pm

I'm going to be purchasing some gold soon and do not want the physical kind.

Which ETF would you recommend from GLD, IAU, PHYS, or AAAU?

Thanks.
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pugchief
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Re: Which Gold ETF Would You Recommend Now?

Post by pugchief » Fri Feb 14, 2020 5:51 pm

IMO, AAAU has too low of a trading volume to consider seriously. I would recommend IAU because it has a substantially lower expense ratio than PHYS or GLD. Also worth a look is GLDM. Decent volume, low expenses.
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Tortoise
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Re: Which Gold ETF Would You Recommend Now?

Post by Tortoise » Fri Feb 14, 2020 6:03 pm

SGOL might be another one worth considering. I hold some of it. Similar expense ratio and assets under management as GLDM (although its average volume seems to be lower for some reason).
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Re: Which Gold ETF Would You Recommend Now?

Post by boglerdude » Sat Feb 15, 2020 10:15 pm

> AAAU has too low of a trading volume

How low is too low and why's this a problem
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pugchief
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Re: Which Gold ETF Would You Recommend Now?

Post by pugchief » Sun Feb 16, 2020 8:38 am

boglerdude wrote:
Sat Feb 15, 2020 10:15 pm
> AAAU has too low of a trading volume

How low is too low and why's this a problem
Most experts would say somewhere around 1M shares/day, but certainly a few hundred thousand at a minimum. Currently, AAAU has an average volume of under 67,000 shares/day.

Why? Because if you need to sell a bunch of shares for whatever reason, you may have difficulty receiving a fair price as the market makers can manipulate thinly traded securities.
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mathjak107
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Re: Which Gold ETF Would You Recommend Now?

Post by mathjak107 » Tue Feb 18, 2020 5:08 am

i found at times the spreads in iau can be pretty wide compared to gld .
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sophie
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Re: Which Gold ETF Would You Recommend Now?

Post by sophie » Tue Feb 18, 2020 7:55 am

pugchief wrote:
Sun Feb 16, 2020 8:38 am
boglerdude wrote:
Sat Feb 15, 2020 10:15 pm
> AAAU has too low of a trading volume

How low is too low and why's this a problem
Most experts would say somewhere around 1M shares/day, but certainly a few hundred thousand at a minimum. Currently, AAAU has an average volume of under 67,000 shares/day.

Why? Because if you need to sell a bunch of shares for whatever reason, you may have difficulty receiving a fair price as the market makers can manipulate thinly traded securities.
Since the gold shares are backed up by the Perth Mint and they can be converted to physical gold on request, I'm not sure you will really need a buyer for your shares in order to sell. This ETF, unlike others, is really a proxy for unallocated gold storage directly with the Mint, except with a different fee structure. I WOULD worry about small volume with an ETF like GLD or IAU, because their shares are not backed up 100% with gold reserves in the fund's direct possession.
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pugchief
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Re: Which Gold ETF Would You Recommend Now?

Post by pugchief » Tue Feb 18, 2020 2:07 pm

sophie wrote:
Tue Feb 18, 2020 7:55 am
pugchief wrote:
Sun Feb 16, 2020 8:38 am
boglerdude wrote:
Sat Feb 15, 2020 10:15 pm
> AAAU has too low of a trading volume

How low is too low and why's this a problem
Most experts would say somewhere around 1M shares/day, but certainly a few hundred thousand at a minimum. Currently, AAAU has an average volume of under 67,000 shares/day.

Why? Because if you need to sell a bunch of shares for whatever reason, you may have difficulty receiving a fair price as the market makers can manipulate thinly traded securities.
Since the gold shares are backed up by the Perth Mint and they can be converted to physical gold on request, I'm not sure you will really need a buyer for your shares in order to sell. This ETF, unlike others, is really a proxy for unallocated gold storage directly with the Mint, except with a different fee structure. I WOULD worry about small volume with an ETF like GLD or IAU, because their shares are not backed up 100% with gold reserves in the fund's direct possession.
So if you needed to liquidate to raise cash (say, for your bail, LOL) and had to sell while gold was getting mauled, you would call up Australia and and ask to convert your shares to bullion? Or have them mail you a check that will take 3 weeks to arrive?
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sophie
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Re: Which Gold ETF Would You Recommend Now?

Post by sophie » Tue Feb 18, 2020 4:29 pm

What bail? All I'd have to do is walk away, and New York would be powerless to go after me.

Don't know what the procedure is to convert AAAU shares to physical, but the point is that the gold is in their vaults and not loaned out to a third party or tied up in some type of derivative trading. They can make good on the sale whether there is a buyer for your shares or not. At least theoretically. :-)
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Re: Which Gold ETF Would You Recommend Now?

Post by KevinW » Tue Feb 18, 2020 5:53 pm

GLDM or IAU due to low expenses.
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Re: Which Gold ETF Would You Recommend Now?

Post by Don » Wed Feb 19, 2020 10:35 pm

I purchased some GLDM today. Also bought VGLT. Thanks, guys!
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