# MNT: Royal Can. Mint Gold ETR



## Miser

Looks like a cheap way to hold real gold rather than buy and store.
They say you can redeem for bullion, plus fees.
What do you guyz think?


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## andrewf

I don't think having it in a vault at the mint would satisfy the shotgun-and-beef-jerky crowd. But for those who use it as a speculative investment and not a hedge against the apocalypse, sure. I would note though that IAU has a MER of 0.25%, which is cheaper than the Mint.


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## doctrine

Questrade lets you buy gold in either your RRSP or non-reg account. With a $0.10/oz/month, with gold at $1700, its effectively an MER of 0.07%. Much better than RCM's 0.35% or IAU's 0.25%.


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## Miser

Thanxs.
Good stuff.


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## james4beach

I wrote some of my thoughts about MNT in this other thread
http://canadianmoneyforum.com/showthread.php/65498-GOLD-ETFs

I like the look of MNT for Canada-domiciled pure gold exposure. It trades occasionally at a slight discount to NAV (yesterday I saw a discount of -1.3%) but generally has done a very good job tracking the price of gold. The only disadvantages of MNT that I see are:

1. The Mint could be privatized. If this happens, the MNT shares are no longer guaranteed by the government and the price could plummet
2. Gold holdings are unallocated bars

In this respect, I think GTU (Central GoldTrust) is a better "pure gold" fund. But I'm still considering MNT.


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## james4beach

I bought my first MNT a few weeks ago after watching it and being convinced that it does a great job tracking the price of gold in CAD. The fee (taken by the Mint) is 0.35% per year which also makes it very attractive. It's Canadian-domiciled, of course.

As far as I can tell, MNT and CGL.C are the only two ETFs that track gold in CAD. Of these I decided to go with the larger pool ... MNT holds $535 million while CGL.C holds just $69 million.

MNT is working its magic today... the only positive security in a sea of red. Even bonds are getting hammered!

(Clarification... CEF.A which is gold & silver is also mildly positive)


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## hollyhunter

Technically, MNT.TO has been showing support at 18.57 and resistance at 19.18 currently.


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## james4beach

I added to my MNT position at 16.48. Loving this weakness in gold, lowest price in 11 months.

You can easily calculate the fair value NAV (net asset value) as in the following. Use the Mint's web site to look up the per share entitlement of gold.

Gold price 1170 USD x 1.3202 USDCAD x 0.0107100 per share entitlement = $16.54 NAV

Therefore I bought it at 0.36% discount to NAV


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## new dog

If this is anything like last year then we may see a nice run in gold after the Fed rate hike in December. Gold was weak then and after that we had a nice run in gold, silver and the stocks.


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## james4beach

Gold in CAD was flat today over the Fed meeting, and MNT is mostly unchanged this week.

I've played that game of catching a falling knife, which is always painful, but I still think that (in the long term) this is a reasonably good place to buy. I'm curious to see how much farther gold falls.


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## lonewolf :)

Silver last 46 has been up 30 times from first of Jan to Feb 19. The gains & losses have averaged over+6%/year buy on Dec 24th another.5%

Gold over 45 yr period has averaged an annual gain of about 3.5% over this time period if start a little earlier about mid Dec. Though it seasonal trade is from about early August till mid to late Feb from mid Oct to mid Dec flat period though if sell & buy back beta slippage will go against gains.


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## lonewolf :)

Center banks behave like the old odd-lotters, When gold hits the next major decline the central banks will be selling into the decline just like they did in final decline into 1999-2001. If you buy gold when central bankers are selling into decline you most likely will catch the next major bottom.


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## new dog

If their serious of keeping the gold scam going, I believe they need India to come through. If they are able to confiscate gold from the citizens of India and slow the demand from India, this could keep gold down after a possible seasonal rally here. The gold and silver market is completely rigged and technicals don't matter much when they can dump as much un-backed paper ounces as they desire onto the COMEX.

The India gold source can provide the fuel needed to satisfy the demand from China and overseas.

Here is link of latest scams being brought to light.

http://www.reuters.com/article/us-silver-lawsuit-idUSKBN13X1QZ

http://business.financialpost.com/n...at-scotiabank-and-others-rigged-silver-prices

This is from mainstream sources so you can see how badly rigged it all is and I knew it for years but no one would believe it. Having said this you need to know you are not buying into a normal market but one that is badly rigged.


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## james4beach

I thought I'd share, since I've been buying a few 10s of K of MNT lately.

MNT is doing a good job tracking pure gold over time. However on days that gold is weak, it often trades at 0.5% to 1.0% discount to NAV. For those in a buying mood (like me) that gives a good opportunity to buy a bit cheaper than fair value.

The bid/ask spread is, unfortunately, quite large. These weak days can really work in your favour and I've been able to fill at nearly 1.0% discount to NAV. You can easily calculate its NAV in real time, using the market price of gold, USDCAD exchange rate, and fraction of beneficial gold ownership as per the MNT web site. Similarly if you wanted to sell MNT, you should obviously do that on a day that gold is strong.

I'd love to see more daily volume in MNT. It's still more liquid than CGL.C and PHY.U, which are the only 'pure gold bullion' competitors in Canada. By the way, CEF.A is far more liquid, however it has the problem of trading at a persistent large discount to NAV, and is a mix of gold & silver bullion -- not pure gold.


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## hark

james4beach said:


> By the way, CEF.A is far more liquid, however it has the problem of trading at a persistent large discount to NAV, and is a mix of gold & silver bullion -- not pure gold.


Why do u not love the NAV discount that CEF.A provides? The reason of it not being pure-gold is legit, but silver is still in the same asset-class at least.


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## james4beach

hark said:


> Why do u not love the NAV discount that CEF.A provides? The reason of it not being pure-gold is legit, but silver is still in the same asset-class at least.


I love it for purchasing/accumulating shares, and CEF.A is still a great long term holding.

However one of the reasons I hold gold is for my permanent portfolio allocation and the diversification it provides. The fluctuations in discount/premium means that CEF.A is a pretty bad way to "track the price of gold". For the purpose of my permanent portfolio, I want something that tracks gold well.

CEF.A is still very good for long term precious metal investment.


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## james4beach

With the imminent demise of CEF.A coming up, MNT seeks to be picking up in volume and liquidity. For many decades, CEF.A was the only bullion fund with significant TSX-traded volume and liquidity. Since the fund will be dissolved, that's about to disappear, leaving a void for the CAD-centric bullion trader.

However if you look at stock charts you will see that MNT volume started spiking around the time of the CEF.A announcement. I've noticed volume and liquidity on MNT getting better through October, so it's possible that some of the market participants are shifting from CEF.A to MNT.

This could be really good for MNT's future.

Taking a look at current quotes, MNT has traded 101K shares and has a 3 cent bid/ask spread. In comparison CGL.C (the only other CAD traded bullion ETF) has traded less than 1K shares and has a 4 cent bid/ask spread.

Over the last month, MNT has averaged 150K daily volume and CGL.C averaged 24K. *My guess is that MNT will emerge as the de facto CAD-priced gold ETF*.

(Background: Sprott kept harassing Central Fund management to the point where they have basically agreed to hand the assets over to Sprott. There will be a shareholder vote coming up next month but the majority common shareholders have already approved the deal.)


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## james4beach

I hold a bunch of MNT and have been occasionally checking how well its price tracks the real-time NAV of the underlying gold. To do this I calculate the real-time gold value from spot futures and USD/CAD rate and compare it to the midpoint of the bid/ask during trading hours.

MNT trades with a persistent, slight discount to NAV. In my measurements over the last couple of years, I've found it averages -0.7% but at times it's worse. Currently for example it trades at -1.5% below NAV which agrees with the Mint's calculation on their web site.

I'm not sure what causes this persistent discount, but it's relatively steady over the years. MNT seems to still track gold's movements (both short and long term) a little bit better than CGL.C, but both seem to do a fine job. For example, 1 year price changes:

IAU converted to CAD: -1.8%
CGL.C actual price: -1.8%
MNT actual price: -1.5%

Checking these three over time, I've found they all track pretty close to each other. Often, IAU slightly outperforms though apparently not in the trailing 1 year. Any one of these is probably a fine way to hold gold in the portfolio, though I prefer the ones domiciled in Canada.


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## james4beach

For those of you who invest in MNT, beware that the share price on the exchange varies a bit from the ideal price (NAV). You can easily calculate a real-time fair net asset value by going to Mint web site for reserves and selecting net asset value. The fair value for the shares is: (gold price) x (USDCAD exchange rate) x (fraction of oz represented by a share), all of which you can get real time values for throughout the day, for example using Kitco and XE for quotes.

Example:
Gold (USD) as per Kitco = 1281
USD/CAD as per XE = 1.34465
Fraction as per Mint = 0.0106201
Fair NAV = 18.29

At the same time, the mid point on the exchange (half way between bid & ask) is 18.32, meaning the shares trade at a slight premium to NAV. If placing trades, you should be careful to place your orders close to NAV.

I have seen the price on the exchange vary between -1.5% up to +0.2% with an average of about -0.6% versus NAV. I'm not sure why it tends to be negative.


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## james4beach

MNT has now hit all time highs, rising above its previous peak in 2012. Seriously, a great job by the Mint creating an effective bullion tracking ETF with low fees.

Then again... what kind of a nut would want gold in their portfolio? Sure, it tends to rise when stock markets are weak and fear is high, it acts as a currency and protects against weakening domestic currencies, protects against inflation, and it acts as a diversifying third asset in a portfolio

... but other than that, it's a useless, unproductive asset that you can't eat and which pays no dividends! Probably best to avoid it. If you ever have any doubts about that just talk to any advisor and they will remind you that gold has no place in a portfolio.


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## hfp75

james4beach said:


> talk to any advisor and they will remind you that gold has no place in a portfolio.


I wouldn't have a portfolio without Gold in it.... 

I liken Gold to a balancing beam or something that provides stability.....

In fact, if I could find another asset class that I liked I would consider adding it into my overall portfolio too.... being ONLY involved with Equities or Bonds is boring and has some risks to it as we get ever closer to the Zero rate ! Err I mean when we really get started with the printing of money ! 

If its not negative interest rates its MMT.... either way in the near future we will probably see a new level of money creation as the world fabricates and basically gives away money....


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## james4beach

hfp75, make sure you get some real, physical gold. One real risk is that the electronic tracking vehicles (MNT, CGL.C, IAU, GLD) could fail for a variety of reasons. For example if there was some kind of mismanagement or theft at the Mint, the MNT share price could fall and stop tracking gold.


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## Eclectic12

james4beach said:


> ... Then again... what kind of a nut would want gold in their portfolio? Sure, it tends to rise when stock markets are weak and fear is high, it acts as a currency and protects against weakening domestic currencies, protects against inflation, and it acts as a diversifying third asset in a portfolio
> 
> ... but other than that, it's a useless, unproductive asset that you can't eat and which pays no dividends! Probably best to avoid it. If you ever have any doubts about that just talk to any advisor and they will remind you that gold has no place in a portfolio.


A bit bitter and projecting maybe? :rolleyes2:




james4beach said:


> ... make sure you get some real, physical gold. One real risk is that the electronic tracking vehicles (MNT, CGL.C, IAU, GLD) could fail for a variety of reasons. For example if there was some kind of mismanagement or theft at the Mint, the MNT share price could fall and stop tracking gold.


Sure ... and your kid could also find the gold coins and spend them or there could be a break in. A mix seems a better way of hedging your bets IMO.


Cheers


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## james4beach

Well I was joking, thought I'd poke fun at all the great reasons to not invest in gold. Personally I think it's great for diversification in my asset allocation and I couldn't care less that it pays no dividends and has no nutritional value.

As for the gold coins, yes they are at risk too. I think it makes sense to use the ETFs for the bulk of holdings, also allows rebalancing in asset allocation (I have both MNT and IAU, more liquid). I would hold the minority of my gold allocation in physical bars & coins.


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## james4beach

Beware everyone, as gold spikes to new highs (it has now hit new highs in CAD) this MNT is having a little trouble. It seems to be straying from NAV slightly, about 0.5% premium to NAV.

That's not a huge dislocation from NAV so it's not catastrophic, but the bid/ask spread has widened significantly and it's currently around 10 or 11 cents! Be careful if you're placing orders.

Probably due to the significant new buying interest in gold. It's still doing a pretty good job at tracking bullion, as is CGL.C which is the other choice domestically.


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## james4beach

Today, MNT and CGL.C (both track gold bullion) have hit new all time highs again


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## gardner

my CEF.TO is finally worth more than I paid for it. It has been a long wait. I am tempted to dump it and move to MNT.


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## james4beach

gardner said:


> my CEF.TO is finally worth more than I paid for it. It has been a long wait. I am tempted to dump it and move to MNT.


Reasonable idea. I dumped it as soon as Sprott ruined it... I hold all of the following and think they're all pretty good:

* MNT (CAD) but beware the large bid/ask spread
* CGL.C (CAD) has a tight spread, but a high MER and is a small fund
* IAU (USD) tracks great, low MER, but is foreign

So there are pros and cons of each. MNT is my favourite but you must enter orders carefully. Try using limit order near the bid/ask mid point. Once you run into another retail investors, your orders will match. The market makers aren't helping much on this one.

Given that "gold tracking ETFs" are somewhat of a new invention, and I have a pretty large holding, I decided to spread my risk around between these three.


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## doctrine

I know someone who a few weeks ago picked up $150k of MNT in the $22-23 range. It cost easily 0.2-0.3% extra in the bid/ask spread to grab it and I'm pretty sure he was into market makers at that point. But very happy with the trade and it didn't take too long to pick it up. Obviously that trade is doing well.


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## james4beach

Nice. For anyone thinking of buying though, just beware of that spread and the potential premium to NAV.

Here's how to calculate it in real-time before you make a trade. On the Mint program's web site you can find the "Per ETR Entitlement to Gold" which is how many ounces each share represents. Currently it's 0.0105891

Next you get real-time gold and USDCAD quotes
gold=1683
USDCAD=1.34203

Therefore real-time MNT nav = 1683 x 1.34203 x 0.0105891 = 23.917
Current bid 24.00 ask 24.29

If you were to hit the ask 24.29 you'd be a whopping 1.56% above NAV
And even the mid point 24.145 is still 0.95% above NAV

I've kept records since 2016 and the premium/discount on NAV, using the mid point, varies between -1.5% and +1.5% so it's not that out of the ordinary. But still something to watch out for when trading. *Unlike other bullion ETFs, it is very easy to calculate the fair real-time NAV of this thing because of the simple structure, as a fractional ownership in Mint's gold reserves.*


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## james4beach

In recent months, MNT has started behaving more like a closed-end fund, since the Mint is not adding more ounces of gold. This is resulting in a premium to NAV. There are also some large bid/ask spreads.

While that isn't ideal, remember that MNT also has some unique advantages, which could be why people are willing to pay a premium to fair value:

The claims on gold are backed by the crown corp and there are no intermediaries. A unit of MNT is almost like official currency. From their ETR program certificate:



> Subject to the terms of the ETRs contained herein, the ETRs shall constitute direct unconditional obligations of the Mint, an agent of Her Majesty in right of Canada, and as such *shall constitute direct unconditional obligations of Her Majesty in right of Canada*.


So while the premium/discount is a nuisance, the fund may be more solid than other competitors. I find it pretty interesting that the holder of a unit gets X ounces of gold, backed by Canada.

( Admittedly, the promise is somewhat theoretical, and does not guarantee accurate pricing )

If you prefer trading in CAD and want something which tracks gold bullion more precisely, then CGL.C is a good option and at least keeps the gold domiciled in Canada.


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## hfp75

So, I just did the math on the MNT premium and it shows that there is a 9.47% premium on this. Is that what you guys are getting ?

Any chance that anyone has a daily / weekly data set on the premium / discount?

Would like to see a graph...

* Edit.... just found this..... at the bottom you can see the premium......



Canadian Gold Reserves - Canadian Silver Reserves - Royal Canadian Mint | Réserve d'or canadienne - Réserve d'argent canadienne - Monnaie royale canadienne


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## hfp75

Its interesting - Using TMX Money comparing MNT and CGL, CGL has lost a 38% lead on MNT !!! and once they crossed MNT has about a 15% lead on CGL... 

If MNT can trade with a variable premium / discount & today it sits at about 10%, this does not explain the constant over appreciation of MNT or the constant depreciation of CGL.... 

from 2015 to 2020 they basically were neck in neck - pretty close to one another, but this year MNT has left CGL in the dirt.... no doubt the MNT premium explains only a portion of the variance.. any idea what the rest is due to ?

Also, how from 2012 to 2015 did CGL loose so much value (vs MNT) ? they are tracking the same thing....


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## Topo

hfp75 said:


> Also, how from 2012 to 2015 did CGL loose so much value (vs MNT) ? they are tracking the same thing....


CGL tracks the price of gold, but is hedged to the CAD. MNT is not hedged. So part of the difference can be explained by the drop in exchange rates between CAD and USD. CGL.C would be the more appropriate comparison since it is not hedged.

Looking at the 5 year chart below, it seems to me that the divergence began about a year ago and seems to be widening. This is likely related to MNT's premium expansion. CGL.C seems to track its NAV closely.


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## james4beach

Topo said:


> CGL tracks the price of gold, but is hedged to the CAD. MNT is not hedged. So part of the difference can be explained by the drop in exchange rates between CAD and USD. CGL.C would be the more appropriate comparison since it is not hedged.


Yes, the valid comparison is MNT versus CGL.C. Both should represent the price of gold in CAD. As Topo's graph shows, the two have tracked each other very closely until recently. Lately, MNT is showing a persistent premium whereas CGL.C is sticking close to NAV.

I think it has to do with the structural difference between the two. CGL.C is a more conventional ETF which includes share creation & redemption, and market makers are involved. This is an open-ended fund and the ability to dynamically issue more shares (or redeem) keeps the trading price in line with the underlying.

MNT is not an ETF; it's more like a certificate representing beneficial gold ownership. There is not an active share creation & redemption process happening. That makes it somewhat like a closed-end fund and I'm really not sure if market makers are active in this.

If you want a holding that accurately tracks the price of gold, CGL.C is likely better.

But there is nothing inherently wrong with closed end funds. I held Central Fund of Canada for many years, and that was a closed end fund. What happens is that a premium or discount appears according to the market's mood. This cuts both ways; there can also be a discount when the asset is out of favour, so you get to pick up the asset (gold) cheaper than fair value.

In the past, MNT has traded at a discount to fair value (NAV) when gold was out of favour. Now it's trading at a premium. The old CEF showed similar behaviour, so I don't find it that unusual.


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## james4beach

MNT hit a new all time high and also the largest premium I've ever seen. I measured over 14% premium to NAV and the Mint's web site gives a similar number. Since I have quite a large position, I sold a few hundred shares today to partially cash out that 14% premium.

I sold MNT at 29.03 and bought CGL.C at 20.77


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## fireseeker

james4beach said:


> MNT hit a new all time high and also the largest premium I've ever seen. I measured over 14% premium to NAV and the Mint's web site gives a similar number. Since I have quite a large position, I sold a few hundred shares today to partially cash out that 14% premium.
> 
> I sold MNT at 29.03 and bought CGL.C at 20.77


I have done the same, twice this week. Gold allocation is now split between those two.
Thank you, hfp75 and Topo, for the idea.

Added: MNT has gained 39% this year, versus 21% for CGL.C. That's hard to ignore.


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## james4beach

fireseeker said:


> I have done the same, twice this week. Gold allocation is now split between those two.
> Thank you, and Topo, for the idea.
> 
> Added: MNT has gained 39% this year, versus 21% for CGL.C. That's hard to ignore.


Yeah, I was ignoring them when the difference was small. But now the premium difference adds up to real money.

I just hope we're right that these are "equivalent". It's still possible that MNT is fundamentally a stronger holding and perhaps it deserves a premium for some reason that I haven't figured out yet.

It might be useful to look at the brokerage codes on the buyers who are buying it at the premium. One might be able to infer if they are retail customers or more professional / institutional.


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## fireseeker

james4beach said:


> It might be useful to look at the brokerage codes on the buyers who are buying it at the premium. One might be able to infer if they are retail customers or more professional / institutional.


Someone using National Bank Financial bought your shares at 29.03.

Since then, Mackie Research Capital Corp has bought more than 5,000 shares of MNT at $29.05-.17. I know nothing about them, but they sure don't look like Robin Hood.


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## james4beach

fireseeker said:


> Someone using National Bank Financial bought your shares at 29.03.
> 
> Since then, Mackie Research Capital Corp has bought more than 5,000 shares of MNT at $29.05-.17. I know nothing about them, but they sure don't look like Robin Hood.


Interesting. Maybe they (Mackie) know something that we don't know. In any case, CGL.C should be fine.


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## james4beach

MNT now at 16% premium and hit another record all time high.

Ideally, the Mint should issue more units and fill more gold into the program. But to do that, they would need more physical gold from refiners.


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## hfp75

I think since you can technically exchange MNT for physical if you pay Loomis to drop it off, people are seeing MNT as on par with physical. 

Whats the current premium on physical bullion right now ? If it’s higher than the MNT premium, I’d hazard to say MNT will go higher, isn’t physical currently in short supply ?

If physical gold really does explode in price due to low availability, then buying MNT and paying Loomis puts you ahead of RCM dealers for gold delivery......

You could argue, that special treatment to fulfill MNT obligations to receipt/unit holders is also worth yet another premium....

premiums on premiums..... gotta love it...


I currently have not sold my MNT but am seriously thinking about it. Is MNTs price rise/premium foreshadowing ?

Might be worth looking at your portfolio before COVID wrecks real havoc.....

Fascinating times I tell ya....


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## james4beach

I do think that the physical limitation on available bars is a factor here. But how long might that last?



hfp75 said:


> I think since you can technically exchange MNT for physical if you pay Loomis to drop it off, people are seeing MNT as on par with physical.
> . . .
> If physical gold really does explode in price due to low availability, then buying MNT and paying Loomis puts you ahead of RCM dealers for gold delivery......


This is very interesting. Could a physical dealer in gold buy MNT and take delivery, therefore converting it to physical? If such things are in play, that would make MNT much like "spot gold" with similar premium to the rest of the physical market.

I don't know enough about these things. I have no idea if that's happening.

MNT has not always had a premium. When I was accumulating the units over the last few years, I generally was able to buy at a discount to NAV, at one point 1% discount.

So I would not count on there always being a premium. I think as long as gold remains "in favour" the premium may persist, but once gold again becomes out of favour / unpopular, this could easily turn into a discount.

I swapped a quarter of my MNT position for CGL.C but plan to hold onto the rest for now.


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## james4beach

By the way, here are 5 year annual returns according to Morningstar
MNT: 13.44%
ZSP: 11.50%
XIC: 3.40%

I continue to have the same opinion I originally had: stocks, bonds, and gold all have the potential to give good returns over time. We can never predict which will perform best in a given time period.


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## Topo

Since MNT is selling at a premium to NAV, the better trade would be to exchange bullion for unit of MNT, and then sell the units on the open market. That way one could pocket the premium with minimal risk.


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## hfp75

Topo, I have considered claiming/converting $50,000 of MNT to bullion and paying Loomis to drop off my physical gold. My wife and I were just talking about this this week. 

I have not had time to research the actual prices of physical gold vs spot. If physical gold is a 20% premium over MNT then there would be another gain to do this... theoretically you could repeatedly do this over and over capitalizing on the RCM ETR program.

I just updated my XLS file and it looks like MNT has a 18.7% premium right now..... this is very strange.

I just checked SGB.ca and it appears there is a 4.5% premium over spot to buy physical..... 

So, to me this premium on MNT doesnt make sense... unless I am doing something wrong....

Or is it considered safe by most investors and thus just simply bought regardless of price ?


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## Topo

hfp75 said:


> Topo, I have considered claiming/converting $50,000 of MNT to bullion and paying Loomis to drop off my physical gold. My wife and I were just talking about this this week.


hfp75, the profitable trade is to be selling MNT on the stock market and buying bullion. Or, if feasible, giving bullion to the mint in exchange for units of MNT.



> If physical gold is a 20% premium over MNT then there would be another gain to do this...


Yes, but my understanding is that at this time MNT is selling at a premium to physical gold.


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## fireseeker

I have never sold a stock short, and I'm not going to start now.

But if I were feeling frisky, I would strongly look at a pair trade here. Sell MNT short and go long CGL.C. The premium seems to be there for the taking -- the only question is how long it might take.


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## hfp75

Fireseeker, 

i think first a person needs to understand the premium... 

I think its brand recognition / safety - RCM and I would bet there is a lot of MNT in rrsp/lira/pensions....

for raw cash accts you can buy physical. There is a liquidity advantage to mnt though that physical doesnt have..... So it might just be brand, security & liquidity...


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## james4beach

We're all just speculating about the premium and what's going on. I think markets can be dangerous when one doesn't know what's going on behind the scenes.

If you made such a pair trade, you could find yourself a year from now with MNT at a 30% premium to NAV and you'd be "in the hole" on what was supposed to be free money.

The last time precious metals were popular, the premium on CEF remained very high for a long time. Anyone who tried to arbitrage that to GLD and SLV (which were possible trades to make) would not have been very happy.


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## james4beach

hfp75 said:


> So, to me this premium on MNT doesnt make sense... unless I am doing something wrong....


It's possible people are just purely buying it for return-chasing at the moment, without understanding the NAV. I have no idea what's going on with it.

The premium could exist for a good reason, or it just might be goofy investor behaviour. I would imagine that if exploiting the difference in prices was a risk free opportunity, that investment banks (including the many ETF desks in Canada) would already be taking advantage of it.

Here's another possible explanation: due to COVID and disruptions at the refiners, the Mint may be *unable* to actually acquire more physical gold right now (= shortage of physical). For them, adding more physical gold and issuing units would be the right thing to do, and would pocket free money for the Mint. They aren't doing it.

Why does the Mint not take advantage of the free money? Are they incompetent? I doubt it. Perhaps their gold ETR program has hit some maximum size due to this unexpected popularity?

Maybe some investors know the Mint's position, and have decided to plow money in it, since gold is actually in an up-trend anyway. They could be doing this knowing that the premium is likely to increase, so they are perhaps trading doubly on both the uptrend & premium expansion.

An investor with that kind of knowledge could even remain hedged on GLD (or whatever) and perhaps purely betting on the premium expansion, because that might be something they can predict by knowing the particulars of what's going on with the Mint and refiners.

Just trying to say, there could be something interesting going on that we aren't aware of.

It might be worth contacting the ETR program and asking why they are allowing such a large premium, and not issuing more units to pocket the free money being offered to them. Central Fund of Canada (before Sprott destroyed them) was very good at using situations like this to acquire more physical and issue units.


----------



## vnenov

My gold allocation used to be in the Canadian Gold Reserves exchange traded receipts (ETR) which trades as MNT (0.35% MER) on TSX.
I've just switched to the iShares Gold Bullion ETF CGL.C (0.55% MER) which also tracks the price of gold in Canadian dollars unhedged.

The reasons for the switch are the bigger bid/spread of MNT and it's trading at whopping 16% premium of the fund's NAV. Anyone buying MNT now is over-paying 16%.
I have concerns with MNT's tracking of gold and the higher daily volatility.

During market hours, you can see the premium or discount on the Mint's web site and looking under Investors: Net Asset Value:
Canadian Gold Reserves - Canadian Silver Reserves - Royal Canadian Mint | Réserve d'or canadienne - Réserve d'argent canadienne - Monnaie royale canadienne

Price of gold YTD: +21.50%
MNT YTD: +44.04% avg. volume: 55,410
CGL.C YTD: 21.03% avg. volume: 74,988

MNT premium: 16% avg. bid-ask spread: 0.48%
CGL.C premium: 0.49% avg. bid-ask spread: 0.37%

Clearly the remarkable YTD performance of MNT is due to its premium. Both CGL.C and MNT are backed by physical gold.

The iShares Bullion ETF gold is stored on a segregated basis in the vaults of The Bank of Nova Scotia.
In the case of MNT, The Royal Canadian Mint act as custodian of the gold bullion on behalf of the ETR Holders and holds the gold in its facilities.
It is convertable to physical gold, but subject to fees and a min redemption of 10,000 ETRs.

I don't see how the convertable to physical gold feature can explain the 16% premium.

If this was the case why KILO.B unhedged gold bullion with MER of 0.28% is also up "only" 21% matching CGL.C's performance?
KILO's custodian is Royal Canadian Mint. Same as MNT. It is convertable to physical gold with subject to fees and a minimum redemption amount, as per the fund’s prospectus: “Redemption requests for a Monthly Redemption must be for physical gold bullion in amount equal to at least the equivalent in value to 1,000 grams international bar or an integral multiple thereof, plus applicable expenses.

How do you hold your gold? If you are buying MNT what justifies the 16% premium you are currently paying?


----------



## james4beach

If you look under the Individual stocks section of this forum, you'll see there is a thread on MNT with some discussion of the premium.


----------



## vnenov

james4beach said:


> If you look under the Individual stocks section of this forum, you'll see there is a thread on MNT with some discussion of the premium.


Thanks. I am new to this forum. This was really interesting discussion in the thread on MNT on the premium, but I see that you are also puzzled about it.
I like the idea of contacting the fund and inquiring about the premium and why are they not issuing new units and buying more physical.

Unless other investors (institutions, pension funds) know something we don't know, there will be a mean reversion at some point and MNT will fall down close to its NAV.
Talk about market timing, MNT was down 3.26% yesterday, while gold was up 0.8% and CGL.G was up 0.82%. I am glad I've switched, but I will monitor the situation closely.


----------



## moderator2

I merged these threads so that the discussion stays under Individual Stocks/Equities


----------



## Eder

Best be careful trying to invest in yellow metal...Kingold on the Nasdaq that holds bullion has been busted as a fraud...
*83 tons of gold bars used as loan collateral turned out to be nothing but gilded copper*. 

Not sure about MNT but why gamble?


----------



## james4beach

Eder said:


> Best be careful trying to invest in yellow metal...Kingold on the Nasdaq that holds bullion has been busted as a fraud...
> *83 tons of gold bars used as loan collateral turned out to be nothing but gilded copper*.
> 
> Not sure about MNT but why gamble?


Kingold is a Chinese gold processor in the Hubei province, owned by an ex Chinese military guy. MNT are units issued by the Royal Canadian Mint, a domestic crown corp, with gold stored in Ottawa.

Like night and day. Why would you draw any connection between these?


----------



## Eder

Kingold is a Nasdaq listed stock meeting its reporting requirements.There is risk of fraud inherent in these type of holdings no matter the implied legitimacy. Fake bullion has made the rounds in NA in the past.


----------



## james4beach

The premium seems to be coming down a bit. At one point it was as high as 16% but currently it's 10%.

It would be nice to get a swift plummet in gold prices to "flush out" this investor behaviour. The resulting pain from seeing the premium disappear should then burn MNT latecomers, hopefully teaching them a lesson.


----------



## hfp75

I am fortunate as I sold most of my MNT a few days back at a nice profit and moved into CGL.C as I saw a few others doing.... I'll take the free ~15% increase in gold holdings.....

I agree that a drop in the price of Gold would be a good lesson for many, despite that it was good for me.

I don't see that happening though with COVID numbers where they are in the states and fall coming in a few months and that naturally will allow COVID to be more virulent.

Not to change the topic, but at our house, we are adding to our dry goods inventory to strengthen our at home capacity....


----------



## james4beach

hfp75 said:


> Not to change the topic, but at our house, we are adding to our dry goods inventory to strengthen our at home capacity....


Curious, what kinds of things are you adding? I have a new apartment and need to fully stock it (from scratch). I would love any ideas... I am nervous about getting sick, in an empty apartment, while living alone.


----------



## Hbrowne

james4beach said:


> We're all just speculating about the premium and what's going on. I think markets can be dangerous when one doesn't know what's going on behind the scenes.
> 
> If you made such a pair trade, you could find yourself a year from now with MNT at a 30% premium to NAV and you'd be "in the hole" on what was supposed to be free money.
> 
> The last time precious metals were popular, the premium on CEF remained very high for a long time. Anyone who tried to arbitrage that to GLD and SLV (which were possible trades to make) would not have been very happy.
> Do you have any idea on how long the premium remained high on CEF and how high was it, the last time gold was this high?


----------



## james4beach

Hbrowne said:


> Do you have any idea on how long the premium remained high on CEF and how high was it, the last time gold was this high?


Central Fund of Canada was significant enough that there are actually indexes which track this. Stockcharts has the !CEFPREM indicator which tracked the premium to NAV on CEF.

You can see that CEF's premium got as high as 27.5% and generally was around 10% during the strong years of this gold bull market.

The premium on CEF, ignoring a couple blips along the way, persisted for 11 years... pretty much the entire duration of that bull market.

So far, the MNT premium has been around for just a few months.


----------



## hfp75

james4beach said:


> Curious, what kinds of things are you adding? I have a new apartment and need to fully stock it (from scratch). I would love any ideas... I am nervous about getting sick, in an empty apartment, while living alone.


I thought a new thread might be good here.... 

Then I dont derail the MNT thread....










COVID - Fall Prep... (where are you @ ?)


Curious, what kinds of things are you adding? I have a new apartment and need to fully stock it (from scratch). I would love any ideas... I am nervous about getting sick, in an empty apartment, while living alone. I thought instead of derailing a good thread (my fault) I would start another...




www.canadianmoneyforum.com


----------



## james4beach

Looks like MNT hit another all time historic high today and I presume the premium is still very high.

I have a partial position inside my RRSP but don't plan to sell any more MNT.

MNT is now only 11% of my total gold holdings, so the premium isn't an issue. I've diversified among: physical, IAU, CGL.C, and MNT. You might say this is a lot of diversification for a single holding, but I don't completely trust these gold ETF products.


----------



## hfp75

Interesting, having a discussion with a friend and thought I would check on the MNT premium and my XLS file shows it at 19.2% right now.... wow.....

I am 23% MNT, 61% CGL.C, 10% MNS, & 6% physical.... for 100% of my PM allocation.....

I sold my MNT a few weeks back for a premium of 15% ? I think... I'm still happy with that but could have had another 4% if I waited. Isn't 20/20 vision great retrospectively ? I still have a 15% win that I am not crying over.

I will end with, what do we think the premium will eventually peak at ?

On another note, I have recently moved $ from a Pension to a LIRA and have been buying in order to meet allocation targets, and have been chasing bond prices all week with buy orders. They have been on a tear.... consistant or should I say persistently growing price points.


----------



## fireseeker

I've shifted half our gold holdings from MNT to CGL.C, cashing premiums of 12-16%.
I'm torn about whether to shift it all. I can't imagine a sound explanation for a premium of this magnitude.
But that could be a failure of imagination.


----------



## hfp75

I sold all the registered mnt, to guard against triggering CG income. If gold drops out of vogue mnt is gonna suffer. I don’t think that will happen soon, but it would hurt....


----------



## james4beach

fireseeker said:


> I'm torn about whether to shift it all. I can't imagine a sound explanation for a premium of this magnitude.
> But that could be a failure of imagination.


Because the structure of MNT, there will likely be a premium when gold is hot, and discount when it's not. I don't see this as a major problem as a long term investor. See msg #63 earlier for an earlier example of this with CEF.

Don't forget that MNT has a lower expense ratio than CGL.C. As a long term holder, the premium will come and go, but you will pay those annual fees no matter what.

So the advantage with MNT is that you have lower annual fees and more direct gold ownership with the government. The disadvantage is that it shows a premium or discount and does not track gold precisely. 

Here's an article that reviews some of the benefits of MNT



> The benefits of ETRs are as clear now as they’ve ever been. “Unlike physical bullion funds or similar gold and silver investment vehicles, the investor directly owns physical gold or silver stored at the Mint,” Caterina said. “You don’t own a unit in a gold-backed fund; there’s no intermediary, which means there’s one less element of cost and risk to think about.”
> 
> Investors can also take comfort from knowing that the Mint is backed by the Canadian government. That means the ETR program is treated as a government debt obligation, giving investors recourse to the government should they ever need it.


----------



## james4beach

CGL.C's MER is 0.56% whereas MNT is 0.35% meaning that a long term investor would expect 0.21% higher annual performance in MNT. But does that mean anything when the premium can swing around by several percent?

Weird, there has been a reduction of 900 units (decrease in units outstanding) since June 24. I presume that means that someone has redeemed units, but this is below the threshold for redeeming physical, so I think this means that someone redeemed it for cash value. Why would anyone do that when they could sell on the exchange?


----------



## fireseeker

james4beach said:


> Because the structure of MNT, there will likely be a premium when gold is hot, and discount when it's not. I don't see this as a major problem as a long term investor. See msg #63 earlier for an earlier example of this with CEF.


Thanks for the link.

I agree, this divergence from NAV is not necessarily a major problem. However, when that divergence exceeds 15% that strikes me as something that should prompt a rethink.
If you are correct in that the premium will come and go, that strikes me as an argument to actively arb it.
Speaking of which ...



> ETRs are also helped by the arbitrage activity of large hedge funds, Caterina said, which watch out for significant discounts to NAV. When they see a discount of 1% or a little more, they can go on the exchange and buy units at a discount, which they’ll then redeem for physical gold. “That allows the units to do what they should: they trade closely in line with the price of gold and silver.”
> 
> The ETRs operate similarly to closed-end funds, which means they don’t have daily creations or redemptions like ETFs. But the Mint does accommodate periodic monthly redemptions and will contemplate issuing new units on the TSX, denominated in US or Canadian dollars, if it sees a market for them.


That's from the article, which is only 8 months old.

So, the Mint was/is expecting arbitrage to keep the NAV in line. Clearly, it's not happening. 

Also, the Mint signalled it could create new units if there is a market, but that clearly isn't happening either.

Peculiar.


----------



## james4beach

fireseeker said:


> So, the Mint was/is expecting arbitrage to keep the NAV in line. Clearly, it's not happening.
> 
> Also, the Mint signalled it could create new units if there is a market, but that clearly isn't happening either.
> 
> Peculiar.


The Mint should absolutely create more units and load more gold into the program. That's the right way to both knock down the price _and_ make a profit for themselves.

If you look at the Level 2 order view for MNT you will also see that it's mostly small retail traders placing bid and asks. For some reason, institutions and market makers are absent.

My guess is that this relates to the COVID shutdown and employees being absent, or possibly the inability to get new physical bars from refiners. The Mint can't issue new units if they can't get the new gold.


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## vnenov

> So, the Mint was/is expecting arbitrage to keep the NAV in line. Clearly, it's not happening.
> 
> Also, the Mint signalled it could create new units if there is a market, but that clearly isn't happening either.


Not sure what are they waiting for. The MNT premium was 20% today and I have sold all remaining MNT holdings (triggering CG) and bought CGL.C.

I do like the lower MER and the option to redeem for physical gold, but considering the 20% premium of MNT vs 0.24% discount of CGL.C I don't think it is worth the risk right now.
It may be an arbitrage opportunity later.


----------



## james4beach

vnenov said:


> Not sure what are they waiting for. The MNT premium was 20% today


Perhaps they are not in the office. Perhaps the people who normally acquire and bring physical gold into the Mint aren't on the job currently, or the refiners don't have that much gold available.

If the latter is true, the premium would be justified and reflecting physical shortages.


----------



## fireseeker

james4beach said:


> If you look at the Level 2 order view for MNT you will also see that it's mostly small retail traders placing bid and asks. For some reason, institutions and market makers are absent.


As I type, there's a bid for 6,000 shares of MNT at $30.70. That doesn't look like retail ...


----------



## james4beach

fireseeker said:


> As I type, there's a bid for 6,000 shares of MNT at $30.70. That doesn't look like retail ...


OK, good point. I was using iTrade's free Level 2 feature and it only shows the top of the order book. I suppose that retail investors had made their way to the top of the order book (best bids & asks) and I couldn't see those bigger orders at lower prices.


----------



## vnenov

> Perhaps they are not in the office. Perhaps the people who normally acquire and bring physical gold into the Mint aren't on the job currently, or the refiners don't have that much gold available.
> 
> If the latter is true, the premium would be justified and reflecting physical shortages.


I am wondering if there is an arbitrage opportunity to short MNT and buy long CGL.G. 20% return regardless of what the price of gold does is not too bad.
The current MNT premium is way above the historical average and should eventually revert to the mean once the MNT people go back to the office.


----------



## james4beach

vnenov said:


> I am wondering if there is an arbitrage opportunity to short MNT and buy long CGL.G. 20% return regardless of what the price of gold does is not too bad.
> The current MNT premium is way above the historical average and should eventually revert to the mean once the MNT people go back to the office.


The first question is whether MNT can be sold short. You would have to check with your broker to see if that's possible. Not every stock can be shorted.

The second issue is how long the premium might last. If it takes many years for the premium to fall back to 0% then you would be tying up a lot of capital for little return. And the premium could actually increase.

There is usually a cost to borrow shares short. Say it's a 1% borrowing rate, which your broker would pass on to you. If the premium lasts for 5 years, you might eventually get a 20% - 5% = 15% return, which isn't a great use of your capital.... that's only 2.5% annual return.

So it's not a slam dunk by any means, but might be doable, especially if you have reason to believe that the premium will disappear quickly.


----------



## fireseeker

I opted for the middle ground -- not shorting, but not sitting tight, either.
Today, I shifted another tranche of the gold holdings from MNT to CGL.c. 
I have only one chunk of MNT left, in a non-reg account with a significant capital gain. So, I'll probably sit on that.


----------



## james4beach

fireseeker said:


> I opted for the middle ground -- not shorting, but not sitting tight, either.
> Today, I shifted another tranche of the gold holdings from MNT to CGL.c.
> I have only one chunk of MNT left, in a non-reg account with a significant capital gain. So, I'll probably sit on that.


Makes sense. I'm down to 11% weight in MNT and 89% in other gold ETFs, and plan to sit here. No point selling the rest when it's a small relative position. I kind of worry that I sold too much of it in reaction to the premium.


----------



## james4beach

The MNT premium has dropped down to 4.7% at the moment, almost back to normal.


----------



## james4beach

Premium now down to 2.3% ... this is great. I wonder what pushed it to normalize.


----------



## james4beach

Looks like some of the excess might be coming off MNT! Down 10.4% today.

Edited to add more detail: according to the stock data I have, today was the largest single day drop in MNT's history. The only day that comes close is a 3% drop back in Feb 2015.

The decline today is due to a combination of gold (in USD) dropping + the USD dropping + premium reduction. Gold certainly can be a very volatile beast!


----------



## Topo

Today MNT is down 2.38%, while CGL.C is up 0.84%.


----------



## james4beach

I've been in contact with the Mint's program administrator for MNT.

I asked them why the Mint does not issue more units, as there is demand, and issuing shares would reduce the premium and expand the asset base. They told me that since COVID-19, the Mint has had to focus on refining and bullion operations which were deemed an essential service for the economy. They are aware of the high premium to NAV, and I was also told that "senior leadership is certainly focused on the ETR".


----------



## hfp75

Doesn't mean they are going to do anything about it.... 

Also if they do add more gold and the price stabilizes then I might swap back 1:1 from cgl.c

As it is Gold has been pretty volatile lately and the premium has been pretty stable at 10%+


----------



## james4beach

hfp75 said:


> Doesn't mean they are going to do anything about it....
> 
> Also if they do add more gold and the price stabilizes then I might swap back 1:1 from cgl.c
> 
> As it is Gold has been pretty volatile lately and the premium has been pretty stable at 10%+


Here's a long term view. I've been taking samples of the premium/discount ever since 2016. When I average all the premiums across these sample, I actually get 0.70% because there were also discounts in the past. This isn't a completely scientific reading but it does show that this premium fluctuates, and on average, may "even out". The same was true for CEF over many years.

This may not be a bad thing. I bought in previous years, when gold was unpopular, at a discount to NAV. Recently I rotated somewhat from MNT to CGL.C when there was this premium. And in the future when a discount emerges again, I can rotate back from CGL.C into MNT, buying more at a discount.


----------



## james4beach

hfp75 said:


> As it is Gold has been pretty volatile lately and the premium has been pretty stable at 10%+


The premium entirely came off MNT today.

Calculating MNT's NAV at the end of the day, I get roughly 25.85 fair value and the shares closed at 25.92 which is awfully close ... about 0.3% premium.


----------



## doctrine

QBTC is undoubtedly sucking up some of the excess/incremental demand. They just raised an additional $100M over two offerings in the last week. QBTC was also trading at a high premium to NAV which has also disappeared. It's good for new investors into these asset classes, although I don't own either myself.


----------



## james4beach

Now 0% premium, MNT is trading exactly at NAV.

If some kind of a discount to NAV emerges, I'll move money from other gold ETFs and buy MNT at a discount.


----------



## james4beach

Today is a very weak day for gold, and I calculated the real-time premium using spot prices for gold and USD.

MNT is currently trading at 0.08% premium to NAV


----------



## hfp75

My tracking (gold price x exchange rate x fractional gold held = actual unit value)

1805 x 1.3 x 1.010564 = 24.79 and it is trading at 24.50 or a discount of -0.29c which is -1.16% 

So, a 1.2% discount to actual gold value.


----------



## doctrine

Another $50M offering in QBTC continuing to hit away at NAV premiums on both perhaps.


----------



## vnenov

hfp75 said:


> My tracking (gold price x exchange rate x fractional gold held = actual unit value)
> 
> 1805 x 1.3 x 1.010564 = 24.79 and it is trading at 24.50 or a discount of -0.29c which is -1.16%
> 
> So, a 1.2% discount to actual gold value.


I've just switched my CGL.C holdings with MNT as it's now trading at -1.2% discount to gold.


----------



## vnenov

vnenov said:


> I've just switched my CGL.C holdings with MNT as it's now trading at -1.2% discount to gold.


Can someone comment if CRA will allow claim of capital loss when switching between CGL.C and MNT? They both track gold in Canadian dollars, but one is ETF and the other ETR and also behave quite differently. One has to just compare the graph of the funds to see that they are not identical properties.

Anyone has an answer? Will highly appreciate it.


----------



## doctrine

It is plausible I suppose, but I guess it depends. You can do it with any ETF even if they track similar asset classes. For example, you can sell XIC and buy VCN at the same time and if you have a capital loss on XIC you can claim it. ETFs may actually reduce the effect of tax loss selling because you can just realize your losses and buy back another of similar type, and that would be supportive of prices of the underlying assets. I guess it does have to be different indexes, but for most major indexes and sub-indexes there are multiple options. Gold may be different.


----------



## vnenov

doctrine said:


> You can do it with any ETF even if they track similar asset classes. For example, you can sell XIC and buy VCN at the same time and if you have a capital loss on XIC you can claim it.


Thanks. As far as I know you can do this only if the ETFs tracking similar asset classes are based on different underlying indexes. With different ETFs tracking the same index, capital loss selling would not be allowed. In your example it will be allowed as VCN tracks FTSE Canada All Cap Domestic Index and XIC tracks S&P/TSX Capped Composite Index.

This is why I am not sure about the pair CGL.C and MNT. They are not tracking an index, but suppose to track the price of gold in Canadian dollars. Still they are quite different the way they are structured (ETF vs ETR) and have different features (MNT allows the exchange for physical gold, etc).


----------



## hfp75

doctrine said:


> Another $50M offering in QBTC continuing to hit away at NAV premiums on both perhaps.



I have been watching the Crypto/Bitcoin market fly as of late (most of us probably have) and from my reading it would appear that younger investors see it as superior to gold (physical or paper). I wonder if the chronic manipulation (plague like) of the gold market has driven people out (Cryptos are probably manipulated too, just not the long hx like gold). I do think that physical gold is superior. 

However I can see why Cryptos appeal. They are not based on a Fx currency (hedged vs unhedged). They will convert into whatever currency you need at the moment - this does appeal. MNT is a product designed to operate in CAD/USD basically. Cryptos are just so volatile....

If Cryptos take off more I think you will see gold drop more. This is fine with me as I think 'physical gold - is the king' and is the underlying concept that ultimately drives the price of paper gold. 

If there is ever inflation in the USA (increasing likelihood at some point) I think you will see physical gold rein supreme. There could however be a competition between paper gold and cryptos (for second place)....

Either way there will be a place for Gold in my portfolio.

* Disclamer - I hold gold 22% GOLD (mix of MNT & CGL.C), I also have 3% SILVER (MNS). I have debated moving gold to 20% and adding bitcoin for 2% - but then I am like, 'am I just chasing my tail ?' What I will do this week is trade my CLG.C for MNT and hold steadfast. Patience is a virtue. (MNT is trading at a discount to NAV).


----------



## james4beach

vnenov said:


> This is why I am not sure about the pair CGL.C and MNT. They are not tracking an index, but suppose to track the price of gold in Canadian dollars. Still they are quite different the way they are structured (ETF vs ETR) and have different features (MNT allows the exchange for physical gold, etc).


Yeah I'm not sure if you can claim cap loss if switching between these 'pure bullion' ETFs. It's true that one can claim capital loss switching, say, XIU to XIC but that's because they track different indexes.

CGL.C and MNT may be considered identical properties as they really do track the same thing. Yes the mechanisms are different but I feel like they are too similar. One can't point to an index and say, they are different indexes.


----------



## vnenov

james4beach said:


> CGL.C and MNT may be considered identical properties as they really do track the same thing. Yes the mechanisms are different but I feel like they are too similar. One can't point to an index and say, they are different indexes.


Agreed. After reading the CRA interpretation bulletin for identical properties even though they have different properties, fees and structures, it does not seem like capital loss selling will be allowed in this case.


----------



## librahall

I show CGL.C -1.8% while MNT.TO +1.8% today. MNT has a strong pull up this morning. I am glad that I rotated CGL.C to MNT in the past few days (when MNT's discount to NAV touched as low as -2%).


----------



## james4beach

librahall said:


> I am glad that I rotated CGL.C to MNT in the past few days (when MNT's discount to NAV touched as low as -2%).


Good job! I wasn't able to catch MNT at a discount, so I haven't placed any trades. I only plan to rotate CGL.C into MNT if I can get MNT at 1% discount or more.


----------



## librahall

hfp75 said:


> I have been watching the Crypto/Bitcoin market fly as of late (most of us probably have) and from my reading it would appear that younger investors see it as superior to gold (physical or paper). I wonder if the chronic manipulation (plague like) of the gold market has driven people out (Cryptos are probably manipulated too, just not the long hx like gold). I do think that physical gold is superior.
> 
> However I can see why Cryptos appeal. They are not based on a Fx currency (hedged vs unhedged). They will convert into whatever currency you need at the moment - this does appeal. MNT is a product designed to operate in CAD/USD basically. Cryptos are just so volatile....
> 
> If Cryptos take off more I think you will see gold drop more. This is fine with me as I think 'physical gold - is the king' and is the underlying concept that ultimately drives the price of paper gold.
> 
> If there is ever inflation in the USA (increasing likelihood at some point) I think you will see physical gold rein supreme. There could however be a competition between paper gold and cryptos (for second place)....
> 
> Either way there will be a place for Gold in my portfolio.
> 
> * Disclamer - I hold gold 22% GOLD (mix of MNT & CGL.C), I also have 3% SILVER (MNS). I have debated moving gold to 20% and adding bitcoin for 2% - but then I am like, 'am I just chasing my tail ?' What I will do this week is trade my CLG.C for MNT and hold steadfast. Patience is a virtue. (MNT is trading at a discount to NAV).


Interesting comparison between GOLD and BTC. I have been investing in BTC for a few years and it accounts for 2-3% now. Besides buying dip during periods like this March, I think Dollar-Cost-Average is a good approach to overcome its high volatile. You can backtest at Dollar Cost Averaging Bitcoin - dcaBTC.

Example: Even if we started investing at previous all-time-high in late Dec. 2017, the return by now would be 134%.


----------



## james4beach

librahall said:


> Interesting comparison between GOLD and BTC. I have been investing in BTC for a few years and it accounts for 2-3% now. Besides buying dip during periods like this March, I think Dollar-Cost-Average is a good approach to overcome its high volatile.


Yeah but dollar cost averaging only works if something goes up in the long term. How do you know BTC won't just go to zero?

What if BTC goes to zero over time, but it turns out ETH is the one that really catches on?

It's safe to accumulate some assets like the stock index, real estate, bond index, commodities, or gold, because we know for certain these things will not go to zero.


----------



## librahall

james4beach said:


> Yeah but dollar cost averaging only works if something goes up in the long term. How do you know BTC won't just go to zero?
> 
> What if BTC goes to zero over time, but it turns out ETH is the one that really catches on?
> 
> It's safe to accumulate some assets like the stock index, real estate, bond index, commodities, or gold, because we know for certain these things will not go to zero.


BTC is unlike other alternative tokens including ETH. BTC is betting on the failure of fiat while the other tokens' success relies on the success of their projects. BTC is the only value preserve asset in the cryptocurrency world. BTC will continue to be very volatile but I don't think it will go to zero. When its price goes below $3000, many hodlers like me will rush in and buy. 

But I don't expect to convince anyone with a few lines. Investing in BTC is just like investing in gold, it requires some kind of belief. ;-)


----------



## james4beach

librahall said:


> BTC is unlike other alternative tokens including ETH. BTC is betting on the failure of fiat while the other tokens' success relies on the success of their projects.
> . . .
> But I don't expect to convince anyone with a few lines. Investing in BTC is just like investing in gold, it requires some kind of belief. ;-)


One still needs a critical mass of people to accept (and believe) that something has value, no matter how good the story is. Something only has value if a large number of humans believe it has value.

Bitcoin has only traded in large public markets for 4 years. This is an extremely short history. Just compare how long people have thought these things are valuable, with active trading among the general public:

Gold: 5,000 years
Stocks: 350 years
Bitcoin: 4 years

Yes investing in all these things requires belief and a "common understanding" together with other humans. Money is nothing but a figment of human imagination, and created by stories we all buy into. But at this point there is no way to know, or even forecast, whether bitcoin will be seen as valuable a few years from now.


----------



## librahall

james4beach said:


> One still needs a critical mass of people to accept (and believe) that something has value, no matter how good the story is. Something only has value if a large number of humans believe it has value.
> 
> Bitcoin has only traded in large public markets for 4 years. This is an extremely short history. Just compare how long people have thought these things are valuable, with active trading among the general public:
> 
> Gold: 5,000 years
> Stocks: 350 years
> Bitcoin: 4 years
> 
> Yes investing in all these things requires belief and a "common understanding" together with other humans. Money is nothing but a figment of human imagination, and created by stories we all buy into. But at this point there is no way to know, or even forecast, whether bitcoin will be seen as valuable a few years from now.


My thoughts: 
1) Time is not the only criteria even not the most important one. Consensus is. If we look at the history of things human used for value preservation, there are many things have much longer lifespan >350 yrs e.g. shells, silver, silk and so on. But they are all gone. 

2) In terms of consensus of bitcoin, look at how many countries that btc are legal in and how many addresses that holds btc. 
















3) As you mentioned, stock has a history of 350 yrs. So, how would you convince people to invest in stock 346 yrs ago?

4) Because BTC is at its early stage and the level of uncertainty is relatively higher, you should only put the money you don't mind losing in BTC.


----------



## james4beach

librahall said:


> My thoughts:
> 1) Time is not the only criteria even not the most important one. Consensus is. If we look at the history of things human used for value preservation, there are many things have much longer lifespan >350 yrs e.g. shells, silver, silk and so on. But they are all gone.


Those things aren't gone. Maybe not shells, but the other two you mention (silver and silk) are still very much valuable, and legitimate stores of value!

Silk remains a valuable fabric. There are also people who collect silk rugs, notably Persian and Turkish silk rugs,which are extremely valuable and retain value quite well over time.

I would bet that Persian rugs, which have been valuable for ~ 2400 years, are likely a safer way to store wealth than bitcoin.


----------



## m3s

BTC is finite, easily verified, and widely accepted. Persian rugs are not finite/scare, not easy to verify, and not even easy to trade

Global stimulus in the form of printing fiat is driving unprecedented amounts of wealth into digital assets this year. We should be measuring value with something finite rather than something that is constantly growing in number. Only 1 country benefits from the petro dollar so we should embrace this change

While there's no guarantee that anything keeps its value - BTC has all the required qualities and the momentum now


----------



## librahall

james4beach said:


> Those things aren't gone. Maybe not shells, but the other two you mention (silver and silk) are still very much valuable, and legitimate stores of value!
> 
> Silk remains a valuable fabric. There are also people who collect silk rugs, notably Persian and Turkish silk rugs,which are extremely valuable and retain value quite well over time.
> 
> I would bet that Persian rugs, which have been valuable for ~ 2400 years, are likely a safer way to store wealth than bitcoin.


Ray Dalio is hosting an AMA at Reddit now. I am quoting his opinion on Bitcoin below. Check it out. 

__
https://www.reddit.com/r/IAmA/comments/k9b4g8/_/gf3i271


----------



## librahall

james4beach said:


> I would bet that Persian rugs


Good luck on keeping all the silks and rugs.


----------



## hfp75

advantage that gold silver have is you can carry them physically and throw them down if needed... harder to do with cryptos. You at a minimum have to have a working phone....

Its really just theoretical end of the world, end of a currency, talk.

MNT works just fine. Its exchangeable for physical, Its a Crown Corp, Its based in the current world trading currency, its easily accessible.

* I do think diversifying is good but if I were to add BTC to my allocation it would get set at 2-3% and my MNT would decrease by the same, in effect do I like BTC enough to drop some gold to have a small allocation... I am not committed either way. Plus at all time highs, now is not the time.


----------



## librahall

No, for cryptos you only need to remember the seed phrase with your memory, even without a paper. And how convenient is it to carry physical gold around the world these days? How to cash out MNT without a working phone?

With interest rate close to zero and bond priced at 75x yield, many equities/stocks are at all time all, not just gold and BTC. I show many funds started to buy bitcoin as small portion of their portfolio.


----------



## james4beach

Something strange happened. The number of units outstanding of MNT just dropped by 6 million. This happened some time between December 11 and January 5.

So it appears that someone has redeemed 6 million units, or perhaps the Mint themselves decided to reduce the size of the program.

Here's the history of the number of units based on my own records:

2016 - started at 29.5 million units
2017 - roughly 27.2 million units
2018 - roughly 25.7 million units
2019 - roughly 24.9 million units
2020 - steady at 24.9 million units
today - down sharply to 18.9 million units


----------



## m3s

People are moving assets to "gold 2.0"


----------



## Tostig

Isn't this how paper money started? Pay the $25 to have the certificates mailed to you then you can barter them in exchange for goods or services. Better than gold and silver stackers and backed by real assets. Good for when the shtf?


----------



## hfp75

Wonder why the mint is winding down the program ?

Maybe they found that storing enough gold to support 30 million units was just to much commitment as they only need to store enough for 15 million units to meet production demands.... ? plus aren’t they storing gold there for kilo ?

wonder if kilo is asking for more space from a fixed storage area ?

On an interesting note.... if there are less & less of these.... the chance of there being a premium goes up & up.... so I’m happy with that thought...


----------



## james4beach

hfp75 said:


> Wonder why the mint is winding down the program ?
> 
> Maybe they found that storing enough gold to support 30 million units was just to much commitment as they only need to store enough for 15 million units to meet production demands.... ? plus aren’t they storing gold there for kilo ?
> 
> wonder if kilo is asking for more space from a fixed storage area ?
> 
> On an interesting note.... if there are less & less of these.... the chance of there being a premium goes up & up.... so I’m happy with that thought...


Well I don't know what to make of that large reduction in units. Does anyone know what it means?

It could be the result of investors redeeming their units, in which case it would not be the Mint's decision.

I really have no idea what's happening there. But I looked at the share during the trading day and saw they were around 2% to 3% premium.


----------



## hfp75

But in theory if there was a large redemption, they would recirculate the units and replace the gold, so they are purposely letting it shrink.....

I have a few thoughts.... ethical and efficiency based....

Ethically they see people buying in at a 20% premium and then selling at neutral, at a 20% loss and there is negative feedback on why the govt is running a program like that, where prices are not reflecting market value. The mints program was created so the govt didn’t have to own gold.... We do, they just store it, use it and replace it.... but price distortions are probably seen as problematic for a govt agency.....

Also.... the mint has to have a certain volume of gold on hand at all times to validate unit prices... if there is a supply prob.... they are short, they might have been repeatedly forced to buy physical gold at a premium to maintain the program... another irritation... less units means less panic buying of physical gold... creates a better buffer for supply chain issues.

Those are just my 2 hunches...


----------



## james4beach

I am really curious, all we can do is guess.

I bought more gold today. I still have a position in MNT but didn't want to buy more due to the premium. Instead, I bought more CGL.C


----------



## james4beach

The insane premium is back, at 8% today. It's rising.

Under normal conditions, it really makes no sense for the number of shares to decrease while the premium is so strong. The correct business decision is to issue more shares and _load more gold_ into the program, because there is investor demand for it.

I can only conclude that the Mint is not able to get their hands on more gold. They did warn earlier that refining shutdowns had constrained their supplies and they've been struggling to get enough bullion.



hfp75 said:


> Also.... the mint has to have a certain volume of gold on hand at all times to validate unit prices... if there is a supply prob.... they are short, they might have been repeatedly forced to buy physical gold at a premium to maintain the program... another irritation... less units means less panic buying of physical gold... creates a better buffer for supply chain issues.


You might be right about that. I'm increasingly thinking that supply problems are behind all of this.


----------



## vnenov

Sold half of my MNT last Friday morning and bought CGL.C. I'm glad I did it since the 9% premium is now down to 3%.

Also, on another note bought a small amount (1% of my net worth) of QBTC in Can$. Purely speculative and very long term play (> 10 years).
Just in case all the Bitcoin speculators are right and I am completely wrong, which has been the case before like with the Canadian real estate.


----------



## james4beach

vnenov said:


> Sold half of my MNT last Friday morning and bought CGL.C. I'm glad I did it since the 9% premium is now down to 3%.


Yup the premium got knocked down hard today. I thought of rotating into MNT but it's still a positive premium.



vnenov said:


> Also, on another note bought a small amount (1% of my net worth) of QBTC in Can$. Purely speculative and very long term play (> 10 years).
> Just in case all the Bitcoin speculators are right and I am completely wrong, which has been the case before like with the Canadian real estate.


I hold $600 of bitcoin, but that's it. I think it's pure speculation and gambling. At times I feel I'm being really stupid even with just $600 exposed, but like you, it's "just in case" the bitcoin people turn out to be right.


----------



## hfp75

I have added a 5% allocation to qbtc also..... I’m down... but I’ll let it ride for a bit it’s very volatile, it’s like juggling old dynamite sticks.....

lots of recent firms filing with SEC to add BTC to their holdings. Fascinating... I have a feeling, central banks are gonna try to create millionaires out of all of us, just like Hugo did for the Venezuelans.... 

I have not sold my mnt, I want a 10+ premium before I swap over to Cgl.c


----------



## james4beach

james4beach said:


> Something strange happened. The number of units outstanding of MNT just dropped by 6 million. This happened some time between December 11 and January 5.


Thanks to @Ukrainiandude for noticing this on the MNT web site. It's under the Net Asset Value page in the notes:

** On December 8, 2020, the Mint received a formal notice of redemption by a holder of 6,000,000 ETRs under the Canadian Gold Reserves Program (representing approximately 24% of the outstanding gold ETRs on that date) that it intends to redeem such ETRs. The Mint does not believe that this redemption is likely to have an impact on trading liquidity of ETRs under the Canadian Gold Reserves Program.​
Somebody decided to redeem 63,000 oz of physical gold and took delivery!

The bad news is ... they wiped out 1/4 of the physical gold in the Mint ETR program.

The good news is ... this indicates extremely strong demand for physical gold. It also shows that MNT is equivalent to physical. And if this kind of demand keeps up, the prices will only go higher. The fact MNT is equivalent to physical (as demonstrated by this) is the really awesome news, I think.

This means that somebody big, perhaps a gold dealer, has used MNT kind of like a futures contract where you can take delivery. This event also pretty much assures that MNT can't get a significant discount to NAV. Since it can be redeemed for physical, anyone would jump on a discount since it means they could buy physical gold for cheaper than spot market prices. This arbitrage pressure assures that *MNT can only develop a premium, but not a discount.*


----------



## james4beach

I have been in touch with the Mint and received back some very encouraging info about the MNT program. I've asked permission if I can post their reply here, and am waiting to hear back from them.

I find the redemption very reassuring. When you hold MNT units you know it isn't a hypothetical gold exposure but an actual contract that can turn into physical metal. The same can't be said for CGL.C, because I don't think one can redeem those units for anything.

I am willing to suffer some bid/ask spread and even pay a small premium for that benefit, because I think fundamentally these are massive benefits of MNT


----------



## james4beach

Here's the reply I got from the Mint. And yeah, there's no better proof that 'the gold is there' than sending 60k+ ounces to the investor!

​Yes, we had a large redemption from an individual holder of MNT. We processed the physical redemption exactly as requested and well within the timeline as stated in the ETR Information Statement. I would hope that the fact that we completed a redemption for 60k+ ounces of physical gold exactly as per the terms of the Information Statement would reassure investors that in fact at all times, 100% of all the gold and silver in the ETR program is held in custody at the secure facilities of the Royal Canadian Mint.​​


----------



## Argonaut

This all sounds good. But to me there are 2 downsides to the fund:
1) Fluctuating discount/premium to NAV
2) Awful liquidity

#1 can be worked around, and even profited from if you watch it and swap in and out.
But to me #2 is a dealbreaker. Liquidity is everything. I swore off MNT one day last year when I made a trade, and then 15 minutes later someone else got a way better price. I felt "screwed", especially when Gold itself was flat in that time. If they find some way to address the liquidity and bid/ask spreads I may look at it again.


----------



## james4beach

Argonaut said:


> 2) Awful liquidity


It's definitely a problem, but I find it just requires prudent limit orders and patience. Look at the Level II quotes and see where the larger bid and ask orders are. I always go about half way between the two, and usually get pretty good fills. So I find that both for buying and selling, I can usually get fills around the midpoint. I did the same when buying MNS today.

My guess is that many small guys will put limit orders around the midpoint, meaning we can match to each other without having to pay the market maker's spreads.

Today I bought some MNS (silver) at around 1% premium to NAV. My gold allocation is a bit on the low side, and this is my first purchase of MNS as part of the precious metals. I think I'm now at 96% gold 4% silver within that slice of my asset allocation.


----------



## Argonaut

Gold and Silver can definitely be held together as part of a precious metals allocation, and you can generate "free" metals by watching the ratio. If it's above 50/60:1, then buy Silver. If it's below 50:1, sell Silver and buy Gold. Silver tends to outperform in big metals bull markets, and Gold outperforms in other times. I might develop some sort of formula someday to take the emotion out of it. Note that Gold has better portfolio diversification benefits though.


----------



## james4beach

Argonaut said:


> Note that Gold has better portfolio diversification benefits though.


I agree that gold is superior for portfolio diversification. Silver, unfortunately, responds to industrial conditions. I've run back tests using both gold and silver and decided to have "gold" in my allocation. Admittedly I am now straying a bit from this but I am going to remain most heavily in gold.


----------



## fireseeker

Does anybody know the googlefinance query for MNT?
It should be "tse:MNT" but this doesn't work.


----------



## leoc2

Deleted


----------



## leoc2

fireseeker said:


> Does anybody know the googlefinance query for MNT?
> It should be "tse:MNT" but this doesn't work.


I am using the yahoo quote for MNT until the google quote is repaired


Code:


=IFNA(VALUE(IMPORTXML("https://finance.yahoo.com/quote/" & "MNT.TO", "//*[@class=""D(ib) Mend(20px)""]/span[1]")))


----------



## fireseeker

leoc2 said:


> I am using the yahoo quote for MNT until the google quote is repaired


Thanks, Leoc2.
I am using Google Finance to feed updates to a LibreOffice spreadsheet. Unfortunately, I can't make the Yahoo substitute work.


----------



## fireseeker

leoc2 said:


> I am using the yahoo quote for MNT until the google quote is repaired
> 
> 
> Code:
> 
> 
> =IFNA(VALUE(IMPORTXML("https://finance.yahoo.com/quote/" & "MNT.TO", "//*[@class=""D(ib) Mend(20px)""]/span[1]")))


Leoc2, thanks again.
Using the following adjustment, I was able to get it to work:



> =IFNA(VALUE(IMPORTXML("https://finance.yahoo.com/quote/mnt.to","//*[@class=""D(ib) Mend(20px)""]/span[1]")))


----------



## fireseeker

leoc2 said:


> I am using the yahoo quote for MNT until the google quote is repaired
> 
> 
> Code:
> 
> 
> =IFNA(VALUE(IMPORTXML("https://finance.yahoo.com/quote/" & "MNT.TO", "//*[@class=""D(ib) Mend(20px)""]/span[1]")))


Hi @leoc2, is this formula still working for you?

As of yesterday, I have been getting a "resource at url not found" error. I've been playing around with the syntax but nothing has helped.
Would love suggestions if you -- or anyone else -- has them for getting a live quote for MNT into a Google Sheet.


----------



## leoc2

fireseeker said:


> Hi @leoc2, is this formula still working for you?
> 
> As of yesterday, I have been getting a "resource at url not found" error. I've been playing around with the syntax but nothing has helped.
> Would love suggestions if you -- or anyone else -- has them for getting a live quote for MNT into a Google Sheet.


Hmmm...just checked my Google sheet...It's not working here either....I will wait for Monday to see if it revives itself on that business day.


----------



## 307169

Just a heads-up that MNT is currently trading at a discount (the discount have reduced since yesterday). It maybe a good time to transfer some CGL.C.TO into MNT.


----------



## vnenov

Thanks. I've already switched my CGL.C holdings for MNT at the end of the day yesterday when the discount was -2.2%.

Normally, MNT trades at a premium and at time it has been substantial.

The only question is if CRA considers MNT and CGL.C as identical properties or not and will allow capital losses to offset capital gains.

I will submit this year's tax return and try to claim the loss, but if it's not allowed I will use MNT/CGL next time CGL is definitely not identical property due to being hedged. The US/Can$ movement is very small in comparison to the gold price movements and the discount/premium differences.


----------



## james4beach

vnenov said:


> Thanks. I've already switched my CGL.C holdings for MNT at the end of the day yesterday when the discount was -2.2%.


Geez was the discount that huge? Guess I missed it. I did look at one point and saw a very small discount but it wasn't even 1% so I didn't bother.

If you caught a 2.2% discount, good job.

Of course it's also possible for the discount to become even more negative.


----------



## james4beach

MNT was lingering today around 2% discount to NAV so I moved some money out of CGL.C

I bought at 1.9% discount


----------



## 307169

james4beach said:


> MNT was lingering today around 2% discount to NAV so I moved some money out of CGL.C
> 
> I bought at 1.9% discount


Good job, thanks for the headup, I am moving my PHYS over to MNT shortly.


----------



## james4beach

Johnny_kar said:


> Good job, thanks for the headup, I am moving my PHYS over to MNT shortly.


Hope you were able to take a look today. Same for @hfp75 or others playing this premium-harvesting game.

At the moment you could make yourself the highest bidder (the first person who will get any trades) at 2.9% discount to NAV. Or even if you were impatient and bought at market, you'd still be buying at 2.6% discount.


----------



## vnenov

james4beach said:


> Hope you were able to take a look today. Same for @hfp75 or others playing this premium-harvesting game.
> 
> At the moment you could make yourself the highest bidder (the first person who will get any trades) at 2.9% discount to NAV. Or even if you were impatient and bought at market, you'd still be buying at 2.6% discount.


I've just switched the remaining CGL.C shares (18.823 avg. fill price) to MNT (22.309 avg. fill price) or around 3.4% discount. It was quite a game and it took about an hour to fill my complete MNT order, but it worked out okay at the end.

I bought my last 40 MNT shares at the ask price as I like to see MNT finish higher at the end of the day


----------



## james4beach

vnenov said:


> I've just switched the remaining CGL.C shares (18.823 avg. fill price) to MNT (22.309 avg. fill price) or around 3.4% discount. It was quite a game and it took about an hour to fill my complete MNT order, but it worked out okay at the end.
> 
> I bought my last 40 MNT shares at the ask price as I like to see MNT finish higher at the end of the day


Congrats! I tried bottom fishing that discount at -2%, but you got a better discount. I suppose the danger is that the discount might remain for a long time.

But it's pretty clear these shares are going to act the same way Central Fund of Canada used to behave. When gold is unpopular, there's selling pressure, and a discount. When gold is popular, there's buying pressure, and a premium.

I used to "harvest" this effect the same way on CEF. But it does require an understanding that the sentiment on gold does change, and that premium/discount cycle will span many years. MNT actually is like a 'closed end fund', since it holds a static amount of bullion. Nothing too mysterious about this.


----------



## vnenov

james4beach said:


> Congrats! I tried bottom fishing that discount at -2%, but you got a better discount. I suppose the danger is that the discount might remain for a long time.
> 
> But it's pretty clear these shares are going to act the same way Central Fund of Canada used to behave. When gold is unpopular, there's selling pressure, and a discount. When gold is popular, there's buying pressure, and a premium.
> 
> I used to "harvest" this effect the same way on CEF. But it does require an understanding that the sentiment on gold does change, and that premium/discount cycle will span many years. MNT actually is like a 'closed end fund', since it holds a static amount of bullion. Nothing too mysterious about this.


The MNT discount is again -3.3% in case someone missed out. I've switched all my gold holdings to MNT. Such discounts are rare and usually MNT trades at a premium.
Last time when I've switched to CGL.C, the MNT premium was above 10%. Also, I have submitted my 2020 tax return and CRA did not object my capital loss for switching between MNT and CGL.C.
So, I think they are not "identical properties" even thought they both hold gold in Can $, there are too many differences and the investors are not indifferent holding one or the other.


----------



## fireseeker

vnenov said:


> I have submitted my 2020 tax return and CRA did not object my capital loss for switching between MNT and CGL.C.
> So, I think they are not "identical properties" even thought they both hold gold in Can $, there are too many differences and the investors are not indifferent holding one or the other.


I doubt very much that CRA would object to this -- or, indeed, even examine the issue -- before issuing a NOA. It doesn't mean the CRA can't one day revisit the claim for a capital loss.

I am particularly interested in this issue because I switched from one to the other this year within 61 days. I figure I have a superficial loss and plan on adding that to my ACB for my current holding.
But I would love to hear/read something definitive about the tax treatment for this switch.


----------



## vnenov

fireseeker said:


> I doubt very much that CRA would object to this -- or, indeed, even examine the issue -- before issuing a NOA. It doesn't mean the CRA can't one day revisit the claim for a capital loss.
> 
> I am particularly interested in this issue because I switched from one to the other this year within 61 days. I figure I have a superficial loss and plan on adding that to my ACB for my current holding.
> But I would love to hear/read something definitive about the tax treatment for this switch.


CRA have issued the NOA and did not object to my capital loss claim. I was also planning to add the superficial loss to my ACB, but decided to try and see if they will object.
I am also considering switching between CGL (instead of CGL.C) and MNT, which are definitely not identical. The small movement of the CAD/USD exchange rate would not make a significant difference in the MNT premium/discount harvesting. Also, running the numbers here are the Standard Deviations and other relevant parameters for MNT, CGL, CGL.C since Jan 2020.
As you can see below CGL has the highest Sharpe ratio (best risk/reward) for the period amongst the Gold funds. Of course the bitcoin fund was way better, but who knew:


TickerTotal ReturnAvg Ret/dayVarianceStd DevCorr SPYBetaMax DDownVol/yearRisk-Adj vs SPYSharpeCAGRSPY30.83%​0.10%​0.03635%​1.91%​1.00​1.00​-33.72%​30.27%​0.00%​0.053​23.26%​QBTC284.23%​1.27%​0.31453%​5.61%​0.07​0.31​-30.59%​89.03%​34.51%​0.227​1556.91%​MNT9.57%​0.05%​0.03589%​1.89%​0.13​0.13​-32.51%​30.07%​-11.12%​0.024​7.37%​CGL.C10.69%​0.04%​0.01484%​1.22%​0.04​0.03​-22.78%​19.34%​-7.40%​0.032​8.22%​CGL13.91%​0.05%​0.01532%​1.24%​0.11​0.07​-19.24%​19.65%​-4.93%​0.039​10.66%​CADUSD3.64%​0.01%​0.00289%​0.54%​0.03​0.01​-10.58%​8.54%​-9.40%​0.023​2.82%​


----------



## m3s

vnenov said:


> but who knew


----------



## james4beach

The MNT discount is roughly 0% today and gold appears to be strengthening. I'm pretty happy about my rotation into it back at the 2% discount.

Kind of makes me wonder how many times I can do this between CGL.C & MNT


----------



## hfp75

I swapped back to mnt a while ago at par, but I recently rebalanced and enjoyed the discount at -2.5%.

One day in the future I hope to enjoy another 10% free cash.....


----------



## hfp75

Thought I would let potential buyers be aware that right now MNT is a discount ! This product doesnt usually trade on this much of a discount. 

-4.63%

It may still suffer & the discount could even get larger. There is no way to know how to predict this BUT a year ago there was a double digit premium on this....


----------



## 307169

hfp75 said:


> Thought I would let potential buyers be aware that right now MNT is a discount ! This product doesnt usually trade on this much of a discount.
> 
> -4.63%
> 
> It may still suffer & the discount could even get larger. There is no way to know how to predict this BUT a year ago there was a double digit premium on this....


I already move all my gold position to MNT, and I am out of room in my TFSA, so no luck for me here


----------



## vnenov

hfp75 said:


> Thought I would let potential buyers be aware that right now MNT is a discount ! This product doesnt usually trade on this much of a discount.
> 
> -4.63%
> 
> It may still suffer & the discount could even get larger. There is no way to know how to predict this BUT a year ago there was a double digit premium on this....


I've also moved all my gold positions to MNT. Currently it is trading at -3.54% discount. It's is very rare the MNT discount drops below 3%, so this is a good opportunity if someone is looking to switch to MNT.


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## james4beach

Hey everyone, @vnenov @hfp75 @Johnny_kar @fireseeker congrats! Suddenly we're staring at a 3.6% premium today. I haven't sold or rotated out (as I think the premium can go higher) but I'm already feeling good about grabbing this at -2% and seeing it at +3.6%.

If bullish sentiment returns to gold, it wouldn't surprised me if we see high single % premium amounts again, at which point I would of course sell and rotate back to CGL.C

My guess as to the cause of the premium change is entirely about sentiment in gold. As you can see by looking at the American GLD chart, gold has been strengthening. Additionally I know that Bay Street has been circulating bullish notes about the gold ETFs (including MNT) to their clients, which helps direct the buyers. This is just the same old investor behaviour of chasing returns and responding to what is hot at the moment.

As an added benefit, as more people (like us) watch and profit from these differences, we both stabilize the MNT price and add more trading liquidity to MNT and CGL.C


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## fireseeker

james4beach said:


> Suddenly we're staring at a 3.6% premium today.


I noticed that today, too. 
Briefly considered some quick arb trading, but reached the same conclusion as you. Fascinating security.


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## james4beach

fireseeker said:


> I noticed that today, too.
> Briefly considered some quick arb trading, but reached the same conclusion as you. Fascinating security.


I also think the premium dropped near the close, might have even gone back to discount (?)


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## vnenov

james4beach said:


> I also think the premium dropped near the close, might have even gone back to discount (?)


Huge discount on MNT right now. If anyone needs to switch now is the time:

*-3.69 %*
as of 6/15/2021 3:28:27 PM

Source:




__





Canadian Gold Reserves - Canadian Silver Reserves - Royal Canadian Mint | Réserve d'or canadienne - Réserve d'argent canadienne - Monnaie royale canadienne






www.reserves.mint.ca


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## vnenov

Ok, this is insane. Time to buy more MNT:
Discount:
*-4.93 %*
as of 6/17/2021 11:59:44 AM


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## vnenov

vnenov said:


> Ok, this is insane. Time to buy more MNT:
> Discount:
> *-4.93 %*
> as of 6/17/2021 11:59:44 AM


Even if my TA analysis is wrong and GLD hasn't bounced of the support at 165 level, getting MNT at 5% discount is sweet:


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## james4beach

If you have deep enough pockets, sure! I already converted (in the registered account where I do this) all of my CGL.C to MNT, so at this point I can't buy any more.

Quite a volatile week in gold. Hopefully this will scare a lot of people and discourage them from holding gold. I'd like it to also flush out any leveraged or greedy players.


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## gardner

Personally, I feel like the signs point to a good deal of inflation coming out of the COVID mess and governments have been printing money to keep the party going for the last two years -- I would have thought the nervous would be stocking up on gold. Is this NAV anomaly peculiar to MNT or is it in other funds too?

EDIT: it looks like CEF.TO is at a 3% discount.


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## peterk

gardner said:


> Personally, I feel like the signs point to a good deal of inflation coming out of the COVID mess and governments have been printing money to keep the party going for the last two years -- I would have thought the nervous would be stocking up on gold. Is this NAV anomaly peculiar to MNT or is it in other funds too?
> 
> EDIT: it looks like CEF.TO is at a 3% discount.


I like the theory that all the money printing is landing in stocks, bonds, real estate, and crypto. That the inflation is being contained in these assets, so that's why we don't see prices spiking (up a bit, sure). Will the money start to flow out of these capital assets and into the economy? Not sure... Where does gold fit in? It's just an asset like the others, where people might or might not go towards, looks like they haven't this time though.


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## james4beach

gardner said:


> EDIT: it looks like CEF.TO is at a 3% discount.


The premium/discount on MNT matches up quite well with general sentiment in the gold space. For example there have been net redemptions in recent months out of the giant GLD and IAU as well... so the MNT discount is logical. It's reflecting general investor sentiment: gold has been weak for several months.

Remember, this thing is like a closed-end fund. There is a constant amount of gold in their vaults. If there's buying pressure, then the share price rises above NAV, because there's no change in the vaults. If there's selling pressure, the share price falls below NAV. It has always been the same way with the old Central Fund (CEF) though I don't bother watching the new CEF any more, ever since Sprott ruined it.

As for primary causes of gold weakness. I think the story is that early 2020 brought inflation and devaluation fears during COVID, plus a flight to safety as money fled stocks. Now that fears are alleviating *and* it's looking like there is not going to be any significant inflation, I think it makes sense for people to abandon gold.

Money is coming out of gold and bonds (risk hedges) and piling into equities. This is a beautiful behaviour and is what gives us the low correlations between these asset classes.

Investors love to chase returns, so they are chasing the high returns in stocks and piling into those (buy high) while abandoning diversification and hedges (sell low).


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## gardner

vnenov said:


> View attachment 21795


Where did you get this chart? The ones I can find on mint.ca present the data in a totally useless way and do not show real time data at all today for some reason. I'm curious to watch this trend, if it continues.


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## vnenov

gardner said:


> Where did you get this chart? The ones I can find on mint.ca present the data in a totally useless way and do not show real time data at all today for some reason. I'm curious to watch this trend, if it continues.


I use Trading View. I have published the GLD chart above GLD trend and short-term direction for AMEX:GLD by vdimitrov73, or you can create your own.


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## vnenov

vnenov said:


> I use Trading View. I have published the GLD chart above GLD trend and short-term direction for AMEX:GLD by vdimitrov73, or you can create your own.


Inflation surprise + no FED policy change = Gold 









GLD trend and short-term direction for AMEX:GLD by vdimitrov73


We have a bullish setup for Gold as it crossed the trendline since the last top, now it is at the resistance line of $171.04. If it closes above it with a good volume and we are off to the races.




www.tradingview.com





Just to update you guys that we have a bullish setup for Gold as it crossed the trendline since the last top, now it is at the resistance line of $171.04.
If it closes above it with a good volume and we are off to the races.










Here is a bigger picture:


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## 307169

MNT is trading at 4 % discount to NAV right now.


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## Franko

Hi everyone,

I was wondering if anyone could enlighten me as to how to determine the true, real-time NAV of MNT (ie: determining the premium/discount that the shares are presently trading at) - this would go a long way to reassure me that I'm not paying too much of a premium when buying shares, etc (and ideally buying at a discount, of course).

Thanks in advance!


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## 307169

Franko said:


> Hi everyone,
> 
> I was wondering if anyone could enlighten me as to how to determine the true, real-time NAV of MNT (ie: determining the premium/discount that the shares are presently trading at) - this would go a long way to reassure me that I'm not paying too much of a premium when buying shares, etc (and ideally buying at a discount, of course).
> 
> Thanks in advance!


The mint calculate it for you, but you can do it yourself by multiplying the ounce of gold per unit with the price of gold per ounce.


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## Franko

Johnny_kar said:


> The mint calculate it for you, but you can do it yourself by multiplying the ounce of gold per unit with the price of gold per ounce.


Thanks for the info. I found the NAV area on the MNT website and they list the NAV as $23.75/share. The last trade today was $22.95.

So is my calculation correct in that: the fund should be at $23.75/share but went for $22.95/share at the last trade, or a $0.80/share discount, thus that was a 3.4% discount to NAV?


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## m3s

Gold is -13% during a year of rampant inflation and the annual return of gold is 0% over a decade of money printing

The younger generation is not interested in shiny rocks imo


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## james4beach

m3s said:


> The younger generation is not interested in shiny rocks imo


Thank goodness the Robinhood / FOMO crowd ignores gold


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## m3s

Don't ignore the changing demographics james.

The greatest wealth transfer of modern history has begun. The older generation can't take their gold with them. The younger generation is buying digital gold.

Supply and demand.


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## james4beach

m3s said:


> Don't ignore the changing demographics james.


Gold falling out of favour is just fine with me, makes no difference to my investment approach.

I'm not in the game of chasing what's hot.


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## fireseeker

Franko said:


> Thanks for the info. I found the NAV area on the MNT website and they list the NAV as $23.75/share. The last trade today was $22.95.
> 
> So is my calculation correct in that: the fund should be at $23.75/share but went for $22.95/share at the last trade, or a $0.80/share discount, thus that was a 3.4% discount to NAV?


I think you've got it.

During trading hours, MNT provides live updates of the current NAV plus discount/premium calculations here.


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## m3s

james4beach said:


> I'm not in the game of chasing what's hot.


Maybe next decade gold will be hot? Seems like this should have been gold's time to shine


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## james4beach

fireseeker said:


> During trading hours, MNT provides live updates of the current NAV plus discount/premium calculations here.


Yup, and it's pretty accurate. I used to calculate this in my own spreadsheet but saw that their calculation matches it anyway.


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## Jimmy

The TSX is up 15% ytd and gold is down 13% negating all the gains. IMO I never got gold. Bitcoin has replaced it as a diversifier and has many other additional benefits - a currency, better rising investment, storer of value etc. Warren Buffet calls gold a big block of material that just sits there and produces nothing and pays no dividend.


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## Borat

Jimmy said:


> The TSX is up 15% ytd and gold is down 13% negating all the gains. IMO I never got gold. Bitcoin has replaced it as a diversifier and has many other additional benefits - a currency, better rising investment, storer of value etc. Warren Buffet calls gold a big block of material that just sits there and produces nothing and pays no dividend.


Starting to feel this way as well


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## james4beach

Jimmy said:


> The TSX is up 15% ytd and gold is down 13% negating all the gains. IMO I never got gold. Bitcoin has replaced it as a diversifier and has many other additional benefits - a currency, better rising investment, storer of value etc. Warren Buffet calls gold a big block of material that just sits there and produces nothing and pays no dividend.


Perhaps it's time for you to invest in bitcoin Jimmy


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## Jimmy

james4beach said:


> Perhaps it's time for you to invest in bitcoin Jimmy


You should too. Gold is an awful investment according to Buffet. Bitocin is getting more and more accepted in ecommerce and has a growing market. Gold peaks at ~ $1900 then crashes . Looks like it is in its crash phase again and time to get out now.


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## vnenov

Jimmy said:


> You should too. Gold is an awful investment according to Buffet. Bitocin is getting more and more accepted in ecommerce and has a growing market. Gold peaks at ~ $1900 then crashes . Looks like it is in its crash phase again and time to get out now.


Gold has been around for a long time and it's role is to protect purchasing power in a very long term. Another great investor Ray Dalio recommends 7% allocation to Gold, which is what I currently have. I have included Bitcoin as part of my diversified portfolio as well, but a smaller allocation of 1.5%. I may add to it in future, when Bitcoin is out of favor. Every asset has periods of underperformance, no need to jump in and out of an asset class and chase performance. My approach is an annual rebalancing and adding more to my losers, than my winners to bring back the chosen target allocation. This approach has worked well for me in the past 14 years.


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## 307169

Jimmy said:


> The TSX is up 15% ytd and gold is down 13% negating all the gains. IMO I never got gold. Bitcoin has replaced it as a diversifier and has many other additional benefits - a currency, better rising investment, storer of value etc. Warren Buffet calls gold a big block of material that just sits there and produces nothing and pays no dividend.


Not again @Jimmy 😑😑😑.
Although both Gold and Cryptocurrency are money in itself, where they are not reliant on trust of a government. Gold is more useful as a hedge against social unrest and societal collapse, because when societal collapse happen, you will not have the power grid and internet to verify and trade crypyocurrency. This mean if we become Zimbabwe or Venezuela (out of control inflation), gold and other precious metals are more useful.

However, I also *don't* think crypto is a scam in itself (although there are many scam in the crypto world), it is way too early to make a judgment. I need to see more track record before I make a judgment and make my investment decision.


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## m3s

Johnny_kar said:


> Gold is more useful as a hedge against social unrest and societal collapse, because when societal collapse happen, you will not have the power grid and internet to verify and trade crypyocurrency. This mean if we become Zimbabwe or Venezuela (out of control inflation), gold and other precious metals are more useful.


Although I agree in principle.. crypto seems to have the most adoption per capita in countries with the most civil unrest

Reality is you can see people dancing in Kabul today on social media even while surrounded by war. Reality is you can see people partying in Lebanon today on social media even though their fiat is toilet paper. I have been in countries with civil unrest where you can walk by an exploded car 1 minute and a birthday party the next. I do agree ammo and gold are the harder money but even the Taliban have electricity and internet today believe it or not

Reality is life goes on very different than you see on TV and societal collapse is a very slow process. The US is even on that slow trajectory imho


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## hfp75

MNT has a -4.66% value right now - a 4.66% discount to actual value...


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## vnenov

hfp75 said:


> MNT has a -4.66% value right now - a 4.66% discount to actual value...


MNT has a *-5.88%* value right now - a *-5.88%* discount to actual value...


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## fireseeker

vnenov said:


> MNT has a *-5.88%* value right now - a *-5.88%* discount to actual value...


Amazing. Thanks for posting.


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## m3s

Doesn't that mean people are selling gold and MNT

Why are people selling gold during an inflationary environment? Isn't this gold's time to shine?

Gold is like a confused horse looking for the cart it used to pull


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## 307169

The discount have reduced to 2.85%.


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## 307169

The discount further reduce to 1.55 %.

Is probably just a coincident, but is kind of interesting that this happen right after @m3s make his remark upstairs.


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## james4beach

Johnny_kar said:


> The discount further reduce to 1.55 %.


Yeah, MNT has been trading reasonably close to NAV in the last few days.

I'm just holding onto the MNT units and might buy more when I do my annual rebalancing, if it's still at a discount. Later when it's back to a premium, I will again sell and rotate back into CGL.C


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## Freedom2022

All governments keep printing money. I worry about inflation. Gold is a hedge against inflation. I know more people use crypto nowadays as the hedge, instead. Another good value of gold: it is a real valuable metal. People in Asia use gold as jewelry. I own MINT since it is difficult to safely store actual gold.


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## fireseeker

MNT has surpassed a 5% discount in recent days. At the moment, it's about 4.3%.
This is both one of the security's flaws, and one of its attractions.


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## james4beach

fireseeker said:


> MNT has surpassed a 5% discount in recent days. At the moment, it's about 4.3%.
> This is both one of the security's flaws, and one of its attractions.


I agree, it has both pros and cons for sure! I'm actually surprised that the discount can get this large.

Can't someone arbitrage this? I was under the impression that someone could buy tens of thousands $ of bullion and take delivery of it via MNT. Isn't that "free money", as long as someone has deep enough pockets?

This is something a scrappy entrepreneur might want to look into. Basically you can buy some of the Mint's gold inventory for cheaper than market rates. Turn around and sell it back to the market through local dealers, Kitco, etc. You'd have to calculate the overhead of dealing with all that physical gold, though.


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## james4beach

The discount on MNT appears to have disappeared. It's currently trading right at NAV.

For what it's worth, the 1 year performance of MNT is +5% versus pure gold bullion increasing +3%. So it's tracking pure gold reasonably well and actually outperformed in the last year, due to the discount shrinking. Considering that both stocks and bonds are negative over 1 year, MNT is kicking butt here with its positive returns!

As for bitcoin: the 1 year performance is -71%, same for ether. This is way too volatile to really invest in. Consider the 'standard deviations' of these assets, a statistical measure of volatility:

bonds, 5%
gold, 13%
stocks, 15%
bitcoin, 80%
Gold and stocks have similar volatility, but bitcoin has off-the-charts volatility and unpredictability.


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## james4beach

And now I see a slight premium on MNT


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## Freedom2022

I hold MNT for many years. I was under the water. It is break even now. I am thinking to buy more.


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## OneSeat

Gold Has the Potential to Hit $3,000 or $4,000 an Ounce in 2023


Will 2023 be the year that gold hits $3,000 an ounce?




www.usfunds.com





Anyone agree?


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## m3s

OneSeat said:


> Gold Has the Potential to Hit $3,000 or $4,000 an Ounce in 2023
> 
> 
> Will 2023 be the year that gold hits $3,000 an ounce?
> 
> 
> 
> 
> www.usfunds.com
> 
> 
> 
> 
> 
> Anyone agree?


So central banks are buying gold

Too bad Canada sold its gold at the bottom to print more paper fiat

Gold price would really go up if people took custody of it


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## james4beach

OneSeat said:


> Gold Has the Potential to Hit $3,000 or $4,000 an Ounce in 2023
> 
> 
> Will 2023 be the year that gold hits $3,000 an ounce?
> 
> 
> 
> 
> www.usfunds.com
> 
> 
> 
> 
> 
> Anyone agree?


I think it entirely depends on how much the central banks choose to defend fiat currency.

In my view, gold is basically a foreign currency that's independent of government money printing. Gold is kind of like cash, but the value is relative. If central banks *defend* the currencies (CAD and USD) then gold won't go anywhere.

However, if central banks stop raising rates and allow inflation to continue, then fiat currencies will plummet versus gold and the "price" of gold will go higher.


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## hfp75

We are in a self created problem by printing toooo much cash in 2020. The Central Bank balance sheets are a great example of what I am talking about. (There is so much money out there that the Reverse Repo market @ the Fed is overflowing.) Then, with the reaction lag, 2 yrs later (2022) the inflation started and they waited to address the inflation - and here we are now. Inflation could also be dealt with by dropping assets off the balance sheet.... but that would be effecting things from a different angle. 

As long as the CB is manoeuvring within acceptable limits, gold will hover.... if the CB proves that inflation is ' sticky' and @ 6-8% they cannot contain it, then we will see gold react - IMHO. Only time will tell. Over time, gold will keep up with inflation....


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## james4beach

hfp75 said:


> We are in a self created problem by printing toooo much cash in 2020.


I generally agree with what you wrote, but I think this problem started earlier. We've had 13 years of near zero interest rates and quantitative easing. Money printing was very aggressive even before 2020, and many excesses were showing up in 2018 and 2019. For example, there was an IPO and SPAC mania, a surge in unprofitable tech companies, people going nuts with leverage into both stocks and real estate, etc.

So I do think it was a problem created by the central banks but I think it began before 2020 and only got worse, once they amped up QE (dramatically!) plus other stimulus.

I hope they can undo the damage but this has been a long time coming.


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## Freedom2022

I am not sure gold will be over $3,000. I think it will be $2,000. 
I still own MNT.


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## james4beach

I did my annual RRSP rebalancing.

Gold was overweight since it was my best performing asset this year. I sold a few shares of MNT at 1.5% premium this morning, to get myself back down to my 20% gold weighting.

I had bought these MNT units at a discount back when gold was unpopular so it's pretty nice to buy at discount and sell at a premium. Probably an extra 3% return on top of the underlying price in this case.


----------

