How to get PHYSical with Gold
Special thanks to all Fools who contributed to the prior discussion of the tax implications for U.S. investors in closed-end bullion funds like PHYS, as those discussions ultimately prompted this article to bring these important considerations to a wider audience.
How to Get Physical With Gold
Regarding GLD: "In the midst of all that growth, however, revelations about the degree of leverage built into the London paper gold market has raised concern among many gold investors regarding the sanctity of reported gold holdings. Meanwhile, the fact that the fund's custodian -- HSBC (NYSE: HBC) -- is one of two bullion banks alleged by the Gold Antitrust Action Committee (GATA) to have held dominant, market-making positions on the COMEX futures exchange, leads to a natural curiosity regarding potential conflicts of interest."
"Into this boiling sea of uncertainty, Sprott Asset Management launched the Sprott Physical Gold Trust ETV (NYSE: PHYS) in March. Offering the reassuring option of redeeming units for actual physical gold, and coming as it does from a firm that has been an outspoken critic of the alleged price manipulation by the bullion banks, the Sprott Physical Gold Trust ETV (let's call it PHYS) joins a short list of vehicles that I have highlighted for investors seeking the greatest possible assurance of exposure to unencumbered, actual, physical bullion."
"If these complex issues surrounding the bullion proxies have you wondering whether they are worth the peace of mind that comes with exposure to a safe haven, rest assured that you are not alone. Although I view bullion exposure as a critical element of a well-balanced strategy for precious-metals allocation, I feel that quality mining companies are too often overlooked by those investors who may be looking to gold or silver for the first time in their investing experience."
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