WARNING on ETFs on Gold & Silver

(2 posts)

  1. pgcyf2007
    Member

    There is an increasing WARNING about BULLION ETFs see below

    Morgan Stanley pays damages for Precious Metals Fraud
    Written by Jeff Nielson Friday, 24 July 2009 11:26

    Silver Wheaton The Safe Alternative to SLV
    by: Jeff Nielson September 21, 2009 | about: SLV / SLW

    What do you thing about " gold and silver" prices manipulation through financial investment ( Bullion ETFs like GLD & SLV) has not really the gold and silver inventories they said that means some banks are creating " gold/silver paper" like they created " paper/fiat money"

    I would appreciate a discussion on this important subject for small investors

    Posted 2 years ago #

  2. Donato
    Member

    Hi pg . . .
    Regarding GLD yes, your fears have already been confirmed. In fact, GLD will not allow an audit of it's reserves. Personally, I prefer not to think of it as price manipulation, but rather supply and demand. The more demand, the more shares they sell. Whether or not they actually have the gold.

    It's really no different than a stock. Often the market cap is overvalued compared to it's actual net worth. But people keep on buying more shares. I am a technical trader and only think of stock (and ETF's) as pieces of paper that increase and decrease in value. Buffett is a value investor, he likes to think of his stock purchases as buying a piece of the company. Both methods can work.

    I wouldn't doubt that SLV is set up the same as GLD, but I haven't looked into it.

    If you want an ETF for gold, but are afraid of GLD, then buy GDX. GDX has stock of real companies behind it, and they track pretty much the same. So, ironically, GDX probably won't really give you the protection you might be looking for. After all, if GLD crashes, GDX probably will also.

    Good Luck

    Posted 2 years ago #

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