Precious Metal Bullion VS ETFs

Posted: January 28, 2011 in ETFs, Precious Metals
Tags: ,

The distinction between investing in an ETF and investing in physical metal bullion is unclear to many. In an article on Seeking Alpha, Trace Mayer describes the differences.

Quoted from Seeking Alpha:

The ETFs GLD and SLV are commonly represented as being bullion. Accepting this assertion is naive and with potential financially lethal consequences. While GLD and SLV track the relative prices that is where the similarities with bullion end.

On May 20, 1999, Alan Greenspan testified before Congress, “Gold is always accepted and is the ultimate means of payment and is perceived to be an element of stability in the currency and in the ultimate value of the currency and that historically has always been the reason why governments hold gold.”

The ETFs GLD and SLV are not this ultimate form of currency. I will raise only a few essential issues, although there are many.

Read more by visiting the original article here.

This material is for informational purposes only. Although it is obtained from sources believed to be reliable, Leland National Gold does not guarantee its accuracy, or being all-inclusive. Past performance is no guarantee of future results. There are risks in buying and selling physical metals. The potential for loss as well as gain increases by leveraging physical precious metals transactions. Never trade with more money than you can afford to lose, and always be sure to read the Risk Disclosure provided in your account documents.

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