If they are short that means they don’t own Gold themselves to sell, I would wonder who’s Gold they are selling?

Again it’s down to trust, I don’t trust the big banks that are in bed with the central banks. Gold is their enemy, it reflects their governments debasement of the fiat currencies. It is the ability to print money that gives government it’s power to implement the stealthiest tax of all, inflation. None of this action can be hidden from Gold which is why I am taken to believe in the manipulation of the precious metals markets by central banks and their agents to suppress the price of Gold and Silver to artificially prop up their fiat currencies.

So for me there is no substitute for physical for long term holding. When the big banks get caught on the wrong side of the trade that is when you will see the paper market for Gold collapse and physical rise like a phoenix from the flames.

Hey maybe I have been sucked in by the conspiracy theorists but I sleep well at night knowing I own my Gold. That being said I do presently have a small position in ‘paper’ metals (not GLD) just to protect my un-invested USD from devaluation while I look for other opportunities (as you said, the liquidity is better in paper).

At the end of the day both physical and paper are valid vehicles for investment after you have weighed your own risk tolerance and trading/investment strategy.

I think the point Boko is getting at is that Gold stocks (Miners not ETFs tracking physical) tend to be more volatile than the price of Gold it’s self (although I could be wrong about that).

http://www.spdrgoldshares.com/sites/us/faqs/

answer #14…. did my research:)

Just took a look at the returns of both this year..

Physical gold is up 20,4%
GLD is up 19,9% (after fees)

When you consider the costs involved of holding physical gold (illiquid, shipping, spreads, where you hold it, insurance if you keep it at home, etc, etc)… there is such a small difference, I would say that it’s not worth the hassle to own physical gold in my opinion…

I think it’s actually safer over there than in most placer where I would hold it. And it just seems like a lot of fees involved in buying, shipping, etc, etc.. And when you sell it, how good is the market, how liquid is it?

Physical bullion held in CIBC vaults and specifically allocated to CEF (http://www.bullionvault.com/help/Definitions/definition_unallocated.htm). Independently audited twice a year if memory serves me correct. Not something that either GLD or SLV appears to do.

Also if the fund holds bullion with a 3rd party that is a another layer of risk added between the holder of GLD and the actual asset.

GLD is great for trading but if you are looking for a store of value to hold for an extended period you cannot beat physical metal from a risk stand point. Sure you pay a premium for the reduced risk profile but it’s one I’m willing to pay to know that my investment is not in a ponzi scheme.

In case you wanted to do a little more research:

http://www.gata.org/
http://www.investmentrarities.com/tbarchives.shtml