Archive for the ‘ETFs’ Category

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.

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