Bullion moved up again today while mining stocks held onto their gains from yesterday.
Performance Information from Feb. 5th benchmark date:
SPDR tonnes: up 15.4%
Bullion (SPDR NAV): up 4.6%
Dynamic Precious Metals Fund: up 8.8%
Toronto Global Gold Index: up 7.9%
Jeff's Gold Stock Portfolio: up 16.7%
Kinross anounced Q4 results at the close today. As expected, production and cost results were outstanding but a previously announced goodwill write off might mute market response tomorrow. Hope not! Jeff holding 10,000 Kinross warrants.
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The SPDR Gold Trust holds gold and is expected from time to time to issue Baskets in exchange for deposits of gold and to distribute gold in connection with redemptions of Baskets. Presumably, the operations of the Trust primarily consist of constructing and exchanging these baskets of securities for gold.
ReplyDeleteIs SPDR Trust REQUIRED to increase its inventory as it is the reserve backing for its successful ETFs? This might help explain the increase in Total Assets, which nearly doubled from 2007 to 2008.
Individual investors can't redeem shares for gold, and institutions that could would be disposed to do exactly that. Does the Trust buy and sell gold? The expense ratio is about half a percent. It is hard to understand the basis for its profit margin/operating margin of 96%.
The investment objective of the Trust is for the Shares to reflect the performance of the price of gold bullion. So investors get the result of gold price changes without the difficulties of actually holding gold.
If holding this ETF is to be a proxy for holding physical gold, it would be good to understand how it works.
What the requirements are for SPDR to buy or sell bullion are not clear to me but they seem to have huge gold holdings which fully back up the trusts Net Asset Value per unit (NAV). Compare this to the more popular and larger capitalized COMEX Gold Trust (IGT-T) and you will see that COMEX has a very small proportion of physical bullion backing its NAV ... Yes it would be nice to understand the rules of operation for these listings.
ReplyDeleteA lot of non-gold-related securities are posting new 52-week lows today. AUY has held up well. It may be beyond the scope of this blog, but an obvious question is "What percentage of your portfolio should be gold or precious-metals related securities?" Looks like a person with a 10- or 20% weighting is still on the way to the poorhouse.
ReplyDeleteTime for an investment update, Mr. Smith!
ReplyDeleteI got tired of waiting for AUY to decline, and instead invested this morning in PWE. My paper profit today is $1350, including the dividend that will now come to me.
(Hello! Other investors must have been watching the distribution date, as the stock has tanked in the early aftermarket.)
Yamana Gold did reach my buy point of $8.45 later in the day. Too late for me (for today)!
Let's see how gold and the market react to Obama's jawboning tonight.