# Simplest way to invest in gold



## canadian_investor (Jul 4, 2011)

What is the easiest and simplest way to invest in gold, without holding the physical metal itself.
i'm looking for these features of the holding,

Exchange traded ie. not physical holding
Tracking the market price of gold as close as possible
No complicated rolling futures contracts, swaps or such gimmickery employed
Ideally traded on the TSX exchange (in Canadian $)

I don't want to hold individual gold producer companies (or ETF either).

hopefully this list is not too restrictive and there must be some easy & liquid security out there.

thanks you everyone in advance


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## Mike59 (May 22, 2010)

My top 2 would be: 

Claymore Gold Bullion ETF (CGL.TO)
Central Fund of Canada (CEF.A), has about a 50/50 gold/silver split

Gold had a great run to 1500, but it's been a volatile ride the last few months. 

FYI, some big players (George Soros for example) have exited large holdings in GLD and moved to gold stocks, with the prediction that they are the next to see a bull run. 

In the interest of disclosure, I own none of the holdings mentioned (anymore)... 

Hope that helps!


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## the-royal-mail (Dec 11, 2009)

We have an extensive thread on the topic of gold. Please refer to that for a range of opinions. In my own case I favour a mutual fund with a track record of good performance. But as Mike59 said, 2011 hasn't been a good year for this. I've lost quite a bit.


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## Cal (Jun 17, 2009)

I am sure the simplest way would be to purchase one of the above mentioned etf's or XGD for the sake of liquidity and some diversification through the sector.


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## Argonaut (Dec 7, 2010)

CGL on the TSX

It tracks the price of gold in American dollars, hedged to the Canadian dollar. If that makes sense. Basically it's a good thing if gold goes up, and a good thing if the Canadian dollar goes up, and these two things tend to happen in tandem.

It's up over 6% YTD, so I don't see how you've lost a lot of money on gold, royal mail?


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## the-royal-mail (Dec 11, 2009)

My RBC Global Precious Metals fund is what seems to be flailing this year. It was a much better performer last year.


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## zylon (Oct 27, 2010)

Year to Date (YTD) percentages

Mackenzie Univ Precious Metals (US$) ... down 6% 
Sentry Precious Metals Grwth ... down 12.5%
RBC Global Precious Metals D ... down 15%

I own Mackenzie and RBC.

gawd I hope nobody's thinking of selling NOW.

longish but informative read from JS Kim
http://www.zerohedge.com/article/surprising-truth-about-volatility-gold-silver-mining-stocks


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## andrewf (Mar 1, 2010)

Interesting. CGL (CAD-hedged bullion ETF) is up about 6.4%. Moral of the story: gold producers and the metal itself are not highly correlated.

Gold producers have been a surprisingly lacklustre investment for some time now.


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## fatcat (Nov 11, 2009)

> My RBC Global Precious Metals fund is what seems to be flailing this year. It was a much better performer last year.


 oh royal, you are greedy man aren't you 

i would second the claymore which is where i would go

i also second the idea that gold equities are a completely different category from the physical metal and much more complex to get right

WOW - gold is up 30 !


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## v_tofu (Apr 16, 2009)

Whats wrong with purchasing physical Gold? It's way better than ETF's etc espeically with the impending global economic collapse approaching.


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## fatcat (Nov 11, 2009)

> Whats wrong with purchasing physical Gold? It's way better than ETF's etc espeically with the impending global economic collapse approaching.


 nothing ... i see it as the preferred method - assuming you plan to hold for 5-10-20 years ... otherwise the costs to trade are too high

also, what if you wrong about the impending global economic collapse ?

you could end up with a backyard full of buried gold that goes down 50% in value and stays there for 20 years ...


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## ddkay (Nov 20, 2010)

In a global economic collapse.. you better have an army to protect that gold


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## v_tofu (Apr 16, 2009)

fatcat said:


> nothing ... i see it as the preferred method - assuming you plan to hold for 5-10-20 years ... otherwise the costs to trade are too high
> 
> also, what if you wrong about the impending global economic collapse ?
> 
> you could end up with a backyard full of buried gold that goes down 50% in value and stays there for 20 years ...


I see it as the preferred method as well, and plan to hold for 10+ years. I am fortunate that my father had the same idea and has passed down his gold collection to me. The OP seems to want other methods though.

I'll be wrong about the Economic collapse when our currencies are actually backed by something, when the US stops raising the debt ceiling, and Greece, Ireland, Portugal, Italy, Spain stop taking more bailouts. But i've been wrong before


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## v_tofu (Apr 16, 2009)

ddkay said:


> In a global economic collapse.. you better have an army to protect that gold


I dont' have an army, but hopefully my Mossberg 500 with double O buck shells will do the trick!


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## andrewf (Mar 1, 2010)

Our money hasn't been backed by anything other than the word of their issuers for decades. You could well be dead by the time that economic collapse comes along, if ever.


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## canadian_investor (Jul 4, 2011)

good feedback everyone.
It is true I don't want to hold physical gold.
Storage would need a bank deposit box.
Then there are fees and commission charged by the agent like scotiabank.
I also like it to be liquid so that I can get out whenever i want.

what some of the members said about mutual funds is the reason I don't want to buy gold producers.
too many dependencies and too many things that can go wrong, and does.
just look at Barrick what a disaster for investors.

I will look at CGL.

are there any double or triple leveraged bull ETFs for Gold in the Canadian market?


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## v_tofu (Apr 16, 2009)

canadian_investor said:


> good feedback everyone.
> It is true I don't want to hold physical gold.
> Storage would need a bank deposit box.
> Then there are fees and commission charged by the agent like scotiabank.
> ...


How much are you looking to invest? $50K worth of gold can easily be stored in the smallest safety deposit box of any bank. RBC is about $3 dollars a month.

Scotia bank is a horrible place to purchase gold bullion with the reasons you mentioned above. Go to a local coin dealer, or a reputable online Canadian bullion dealer such as silvergoldbull.com.

Liquidity can be an issue, but as long as you have a coindealer in your area, it is not hard to sell your gold.

You do lose a bit in the spread, but I wouldn't see liquidity as being a problem.

The only thing I'm not sure about is if the price of the safety deposit box, plus the small premiums that dealers sell gold for is less, more or roughly the same as having a trading account plus paying for trades.

For me its nothing but the physical stuff, but best of luck with whatever you decide!


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## v_tofu (Apr 16, 2009)

andrewf said:


> *Our money hasn't been backed by anything other than the word of their issuers for decades*. You could well be dead by the time that economic collapse comes along, if ever.



Exactly, its been decades worth of horrible elitist scum that continue to debase the currency, rewarding the highly leveraged with bailouts, and punish the middle class by devaluing the meager earnings that they had.

Everything has a breaking point, and I believe we are on the cusp of that breaking point.

I'll take my tin foil hat off now.


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## andrewf (Mar 1, 2010)

Horizon has a 2x gold ETF, HBU. There are some more liquid issues in the US, such as UGL.


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## ddkay (Nov 20, 2010)

@v_tofu thanks for the tip on silvergoldbull.com, looks a lot better selection than the other online dealers I looked at.


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## humble_pie (Jun 7, 2009)

what is a mossberg 500.

it's sad how the goldbugs always have a cache of guns hidden away somewhere.

let a little inflation hit, let a little push come to shove, & your friendly goldbug's idea of civilization is to blast his neighbour's brains to kingdom come.


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## the-royal-mail (Dec 11, 2009)

I am not sure right now about owning physical gold. I've heard the horror stories of people only being offered wholesale prices when they go to SELL. So if you buy $100 worth of gold, they only offer you as low as 30 or 40 cents and then add their dealer markup. Some of those jewelers and scrap dealers are the worst for that.

So my bigger concern is 'will I be able to easily find someone who will offer me the MSRP market rate when I go to sell?'

At least when I sell my RBC fund I will get back a very high % of the money I put in, if not a lot more.

Remember the physical stuff is subject to the same fluctuations in valuation as the funds on paper.


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## v_tofu (Apr 16, 2009)

humble_pie said:


> what is a mossberg 500.
> 
> it's sad how the goldbugs always have a cache of guns hidden away somewhere.
> 
> let a little inflation hit, let a little push come to shove, & your friendly goldbug's idea of civilization is to blast his neighbour's brains to kingdom come.



Why is it sad to have a gun? I hunt animals because I believe in self sustainability, not because I want to blow peoples brains out.


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## v_tofu (Apr 16, 2009)

the-royal-mail said:


> I am not sure right now about owning physical gold. I've heard the horror stories of people only being offered wholesale prices when they go to SELL. So if you buy $100 worth of gold, they only offer you as low as 30 or 40 cents and then add their dealer markup. Some of those jewelers and scrap dealers are the worst for that.
> 
> So my bigger concern is 'will I be able to easily find someone who will offer me the MSRP market rate when I go to sell?'
> 
> ...



What is the percentage that you get back? That is a question I asked in the last post. If the costs of a trading account, plus MER fees, etc, are similar to the cost of selling physical gold.

999 bullion will get you much closer to spot price than jewelry. And yes if you buy coins instead of bars you will be paying slightly more.

the buy gold dealers are horrible yes. But I beleive you can find reputable coin dealers that will offer fairly close to spot price.


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## canadian_investor (Jul 4, 2011)

the-royal-mail said:


> So my bigger concern is 'will I be able to easily find someone who will offer me the MSRP market rate when I go to sell?'
> 
> At least when I sell my RBC fund I will get back a very high % of the money I put in, if not a lot more.


you are spot on with that judgement.
there are many problems with holding physical gold not just the storage and liquidity problems.
with an exchange traded security like an etf you can average down, sell into and out of swings and so much more
Gold etf do not pay any dividends so the only way to make money is to trade in and out of the market swings.
my plan is to keep a core number of units long term as the base and swing the rest in and out.

if someone is planning to use gold purely as a store of value against fiat currencies then I guess buying and storing gold bars is the way to go.
but that don't make you any money.

the other problem is if by some miracle the global debt issues are solved or the US$ rises sharply and gold falls sharply it will be already too late to sell out the physical gold.
whereas the etf can be sold with a market order in milliseconds.

for those who follow gold remember that after the last gold bull market crashed back in the late 1970s it did not even touch the sides.
before the physical gold holders would have time to react it will crash and settle at some pre 2003 level and stay there for the next 20 years.


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## the-royal-mail (Dec 11, 2009)

There are no costs of a trading account - the only costs I have with my RBC Precious Metals fund are the MERs which are under 3%. This is significantly less than what I would lose if I had to buy at MSRP and sell at wholesale.

I would be interested in knowing which dealers will offer "fairly close" to spot price. Selling at wholesale basically negates any benefit for the average person to buy physical gold.


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## humble_pie (Jun 7, 2009)

v_tofu said:


> I dont' have an army, but hopefully my Mossberg 500 with double O buck shells will do the trick!


actually you said specifically that the purpose of the mossberg & its ammunition is to "protect that gold."

so not much point now trying to pose as self-sustainable hunter-gatherer.

very disappointed, i was hoping you'd turn out to be a people-friendly green-loving piece of vegan soy pudding.

plus that mossberg doesn't look like any rifle i've ever seen real hunters use. Looks like a vicious anti-personnel weapon.


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## fatcat (Nov 11, 2009)

you can check the buy and sell price of most reputable dealers right on their site: http://bordergold.com/product_rates.php ... usually it is around $50-75 spread

i would say that in a catastrophe you are better off with lots of friends than you are with lots of ammunition

loners with huge supplies of ammo and food generally get picked off pretty quickly

of course, having lots of friends with lots of ammunition might be an even better way to go


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## v_tofu (Apr 16, 2009)

the-royal-mail said:


> There are no costs of a trading account - the only costs I have with my RBC Precious Metals fund are the MERs which are under 3%. This is significantly less than what I would lose if I had to buy at MSRP and sell at wholesale.
> 
> I would be interested in knowing which dealers will offer "fairly close" to spot price. Selling at wholesale basically negates any benefit for the average person to buy physical gold.



Thanks. I was considering something like questrade or e trade, where i believe it is 5 dollars a trade? And I believe I was told there was a monthly cost, but I never really looked into it. What does this precious metals fund consist of? I'm guessing precious metals, but is it a basket of precious metals, miners, etc? If there is no cost to purchasing small amounts bi weekly that might be something I would be interested in.

My local coin dealer offers what I believe is a fair deal, compared to online dealers and those fly by night buy gold silver people. But I never meant physical gold to be bought and sold on a regular basis. It is a hedge against inflation so I believe the benefits are still there.


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## the-royal-mail (Dec 11, 2009)

tofu, it's not necessary to quote everything you reply to. Please simply reply right in the thread in the 'Quick Reply' box. We don't need to read the text twice. 

That said, I am with RBC Asset Management and have units in their no-load RBC Precious Metals fund. There is no cost to buy or sell this fund and you can setup small monthly purchases if you like. This is not a fund to buy for day trading as there are charges for trading too often. This is ideal for buy and hold investing, not active/frequent buy&sell.

http://quote.morningstar.ca/quicktakes/fund/f_ca.aspx?t=F0CAN05NGC&region=can&culture=en-CA


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## v_tofu (Apr 16, 2009)

humble_pie said:


> actually you said specifically that the purpose of the mossberg & its ammunition is to "protect that gold."
> 
> so not much point now trying to pose as self-sustainable hunter-gatherer.
> 
> ...


Oh so you're putting words into my mouth now? Yes, the reason I invested all the money and time in learning how to safely shoot, store and maintain my gun is so that hopefully one day someone will walk into my house so I can pump him full of lead I guess I'm no longer a people friendly person since I own a gun?

it doesn't look like a rifle because it isn't a rifle. You watch too many movies.


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## Argonaut (Dec 7, 2010)

Looks like a shotty to me. Ideal for close quarters defense, like in a house.

Anyway, the best way to own gold is to simply own it. If you're worried about how you'll eventually sell your physical metal, you shouldn't buy it in the first place. I'd rather have the gold than the money at any price. CGL is best for trading positions.. all you're paying is a commission and a small MER over time.


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## humble_pie (Jun 7, 2009)

i know it isn't a rifle. Rifles are what real hunters use because they are good enough marksmen that they are able to mercifully kill an animal with just one perfectly aimed shot.

your piece is a nasty shotgun. Sprays a mess of bullets all over the place. Would probably fail to bring down a deer, let alone a mighty stag.

shotguns are used for bird hunting because the ammo is spread wide & hopefully enough lead pellets will hit the poor flying winged creature to bring it down. Not always down & dead, but at least down. Bird hunters often have to use dogs or (ugh) their bare hands to do the rest of the job.

i learned all this when i was out working in the similkameen in bc.

have you & your father been defending your hoard of gold coins with guns all the days of your lives ? what a lovely thought. Quelle belle pensée.


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## v_tofu (Apr 16, 2009)

humble_pie said:


> i know it isn't a rifle. Rifles are what real hunters use because they are good enough marksmen that they are able to mercifully kill an animal with just one perfectly aimed shot.
> 
> your piece is a nasty shotgun. Sprays a mess of bullets all over the place. Would probably fail to bring down a deer, let alone a mighty stag.
> 
> ...


Oh i see, so those of us that hunt fowl, geese, etc are not real hunters. Real hunters only shoot deer. I'll make note of that.

Yes we've been defending our gold hoard with our guns in one hand, and the bible in the other while condemning heathens to hell. We also don't go to the gay pride parade because we're homophobic, and we eat our steak raw with mash tatters while wearing plad sweaters.

Did i leave out any other stereotypes you have of me?


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## humble_pie (Jun 7, 2009)

tofu you already specified that your gun was to hunt animals. Like you were very clear about animals. You never said anything about hunting birds with shotguns.

and, as another poster helpfully points out, shotguns are real good for blasting away at targets at close range, inside houses.

sawed-off shotguns are even better. Believe they are illegal, though, even in the big ole bad U.S. of A.

has it all been really worth it. It's 40 years since the US went off the gold standard. And your dad's coins have risen, what, 40 times in value.

but it's been 40 years of mean mizzuble paranoid gun-totin bible-thumpin tatters, plads, taters, rags, hominy, grits, victuals, vittles, preachers, parsons, hayseeds, bumpkins, bigots & oafs.

cain't put no price on that there love that's gone missin in yer life.


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## andrewf (Mar 1, 2010)

This has clearly gone off the rails. What was that about gold again?


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## humble_pie (Jun 7, 2009)

rails ? like stay on track, bro ?

ya'll heard whut th' man said. Git yo pappy to buy a collection a them golden eaggles an a sawed-off shotgun.

cain't git no straighter than that.


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## HaroldCrump (Jun 10, 2009)

^ love the accent...you deserved a part in _True Grit_


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## v_tofu (Apr 16, 2009)

humble_pie said:


> but it's been 40 years of mean mizzuble paranoid gun-totin bible-thumpin tatters, plads, taters, rags, hominy, grits, victuals, vittles, preachers, parsons, hayseeds, bumpkins, bigots & oafs.
> 
> cain't put no price on that there love that's gone missin in yer life.


Reported for personal attack and Racism.

You're off my list of people I will protect during the zombie manifestation.


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## GameOver (Jun 28, 2011)

By far the cheapest method are ETFs, but you have risks, are they actually allocating the correct amount of physical gold, are their accounting procedures trustworthy, if the stuff hits the fan are they going to default and your ETF is worth nothing?

Based on my research these are your options, each have varying risks, mostly the risk is in line with the cost of transacting gold. Basically if you plan to hold for a short time period use the top methods, if you plan to hold for longer use the methods farther down on the list. I have chosen to diversify methods between the first few.

from cheapest to most expensive
fee includes buying and selling costs of 20k USD worth of gold, fees will be *slightly* smaller for larger amounts.

ETF NYSE:GLD is less than 0.05% fee/year
goldmoney.com they hold *unallocated *physical gold for you 2.5% + 0.18%/year
perth mint, they hold *allocated *physical gold free storage 3.8%
you hold physical gold bullion from online retailer nwmt.com 4.9% + your storage costs


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## canadian_investor (Jul 4, 2011)

thanks, _gameover_ for the suggestions.
as I said I don't want to hold physical gold, either myself or through a broker.
exchange traded security is my preferred route.
I like the idea of CGL.
It's tse traded and is hedged to our $.

i have a question about ETFS like CGL and GLD.
are these closed end units issued against physical gold bought and stored in a vault somewhere?
therefore the only way to issue more units would be for the fund to acquire more physical gold?

or have they been issued against futures contracts?

if they are indeed backed by physical metal stored, between these half a dozen physical metal based ETFS on nyse and tse is there enough physical gold to back up all the units?
or might some creative accounting be going on?
we've had such a bull run for few years I wonder if all the ETFs, options and other types of weird exchange traded securities can actually be backed by physical gold.


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## andrewf (Mar 1, 2010)

All ETFs are open ended funds, ie, the fund (and other participants) can create or destroy units of the fund if the price deviates too much from NAV.

The physical gold ETFs have new units created when someone gives them a certain amount of gold. The fund doesn't buy gold to create units. Someone who already has gold (possibly the fund sponsor) gives the gold to the fund and receives units of the fund. The process occurs in the reverse when units are destroyed. The fund only sells gold to pay its MER.


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## canadian_investor (Jul 4, 2011)

andrewf said:


> The physical gold ETFs have new units created when someone gives them a certain amount of gold. The fund doesn't buy gold to create units. Someone who already has gold (possibly the fund sponsor) gives the gold to the fund and receives units of the fund. The process occurs in the reverse when units are destroyed. The fund only sells gold to pay its MER.


if I'm understanding what you said correctly, then at any given point in time all units of the ETF are backed by corresponding gold in the vaults of equal value?


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## andrewf (Mar 1, 2010)

Yup. CGL has a list on the Claymore website of all the serial numbers of the bars backing the portfolio. I suppose you have to trust the fund not to be lying about it, but they do have vault audits to ensure the gold is actually there.


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## fatcat (Nov 11, 2009)

> Yup. CGL has a list on the Claymore website of all the serial numbers of the bars backing the portfolio. I suppose you have to trust the fund not to be lying about it, but they do have vault audits to ensure the gold is actually there.


 i would be amazed if every dollar in every etf in the world actually corresponded to the gold it was supposed to correspond to ... there will be people coming up short but i think you just have to pick your fund and take your chances

claymore seems a pretty good bet to me


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## canadian_investor (Jul 4, 2011)

took the plunge and bought 200 @ 13.90
will increase position on corrections


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## fatcat (Nov 11, 2009)

the simplest way to invest in gold ?

how about a remninbi denominated contract ?

http://www.cnbc.com/id/43711508



> *Former Goldman Trader: There's Huge Unforeseen Demand Coming in the Physical Gold and Silver Markets
> By: Courtney Comstock, Business Insider*
> 
> Andrew Maguire, a former trader with Goldman Sachs [GS 132.02 -2.06 (-1.54%) ] and a vocal spokesman about what he suspects is market manipulation in the gold and silver markets, has been saying for awhile that there's a huge unforeseen amount of demand coming in the physical gold and silver market.
> ...


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## ddkay (Nov 20, 2010)

Don't know if this is legit

Property developers in China move into mining


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## canadian_investor (Jul 4, 2011)

I thought I'd restart this thread instead of starting a new one.
the recommendation for CGL worked out well for me, thanks everyone.
I'm now looking for a similar TSX-listed commodity backed ETF for Silver bullion.
Claymore doesn't seem to have anything like CGL for silver.
there are several mixed commodity funds that include other stuff like palladium, platinum that I don't care for.
I'd like to play Gold and Silver separately from each other.

Does anyone know of anything like that purely for silver?


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## Argonaut (Dec 7, 2010)

HUZ on the TSX does the exact same thing as CGL, but for silver. It is somewhat thinly traded and the bid/ask isn't as tight as one would like. If you have any USD around I would recommend SLV in New York instead.


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## canadian_investor (Jul 4, 2011)

Argonaut said:


> HUZ on the TSX does the exact same thing as CGL, but for silver. It is somewhat thinly traded and the bid/ask isn't as tight as one would like.


HUZ looks nice for my purpose. I see that it's perfectly corelated with SLV.
I don't care about bid/ask spreads of a few cents more or less since I don't plan to trade in and out of it every hour 

I take it that like CGL, HUZ is backed by silver bullion in a vault somewhere?


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## KADC (Sep 8, 2011)

*IB and spot gold*



canadian_investor said:


> What is the easiest and simplest way to invest in gold, without holding the physical metal itself.
> i'm looking for these features of the holding,
> 
> Exchange traded ie. not physical holding
> ...


I recently signed up with Interactive Brokers (I'm also with Questrade) and I was surprised that I was not allowed to trade spot gold through them. Two customer service agents and four days later, they replied that 1) Canadians can trade spot gold through American brokers but 2) there are regulatory issues preventing Canadians from trading spot gold through IB which really confuses me given that they are an American brokerage with the required Canadian offices. 

Questrade only has physical gold, so can anyone recommend a Canadian broker that allows trading spot gold?


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