Wow, I just compared the Betashares QAU gold EFT with GOLD and PMGOLD (Perth Mints EFT) and the results are shocking, a massive 15% drop in value!
I thought that QAU hedges against the USD? That would explain the poorer performance as it hasn't really benefited from the drop in AUD which has boosted the AUD gold price which the others have.
Have a read of this for a more detailed explanation of the gold ETFs :- http://www.mymoneycalculator.com.au/gold-exchange-traded-commodities-etcs-on-the-asx
And if you compare all of them to the MTLS metals company index, you were much better off sticking with a gold EFT, even QAU:
Right. So hedging against currency sounds like a great idea, but in this case you would have lost out big time, because you have to ultimately buy and sell in AUD.
That's actually how I'd prefer to buy at the moment, the aussie is low and the usd is high and probably toppy. The usd price might go up from here and the aussie price might be a bit closer to sideways (though I'm sure still up). 6 months ago not so much, but today this might be my preferred choice of O was looking at a gold etf, which I'm not. Honestly it's much easier to just buy CFD's, much lower capital gets tied up and the counter party risk is similar.
Same risk? You must be joking. A CFD is a leveraged derivative versus 100% backed product where the gold is guaranteed by govt.
I wasn't aware that GLD, QAU etc. Were government backed, obviously the perth mint product is different. All the same, I have a physical stack that I hold that's mine, I see no reason not to trade paper when the other non-stack options are keeping your metal at arms length anyway. Either things will be fine or they won't, I can't see too many situations where my paper positions are treated significantly differently or have much more risk than an ETF. If it's a banking liquidity crisis then I can't get my money out when I sell the etf shares just like I can't with my CFD position money. If it's a wealth tax or bail in they will be treated the same. If it's WW3 then you're unlikely to see much difference. Maybe I feel that way because I'm not stacking for a big crisis like that though, but if I was I'd probably be all physical burried in the backyard. Taking positions across a couple brokers that aren't in the market themselves seems as safe for my purposes and the advantages of much lower trading/transaction fees, holding and management fees as well as leverage outweighs any marginal difference in security for my purposes, particularly in this climate.
GLD and QAU aren't govt backed, was just talking about PMGOLD, but nevertheless, GLD and QAU are backed by physical. In the sort of crisis you are talking about yes you have a point, I was more about situations where there isn't a complete breakdown. Say gold goes nuts then a CFD operator may go bankrupt if the shorts on the other side of your long CFD don't pay up, just like happened to some FX operators with Swiss de-peg. No matter how high gold goes, physical backed ETFs don't have that risk. That's why I don't see CFD as comparable to an ETF risk wise.
