Question for the Finance Experts out there. I've been buying physical gold for the last year (on the dips). I've heard about HSBC's Gold ETF's. Pretty handy because they can be bought online if you have an account. No storage costs, no Insurance costs, no security problems, and easy exit and entry. I'm considering doing some more buying in this manner.
Anybody got an opinion on the HSBC product? Good or Bad?
I've been trying to remember who said this, but I can't, so apologies to you:
"When you're stuck in a fire, would you rather have a fire extinguisher, or a picture of one?"
I think a Gold ETF is a great way of trading gold, but nothing else. If you've been buying physical gold (and can easily get hold of it when needed - ie, not in a bank vault) then you probably already understand the benefits. So don't swap one for the other.
Like you, I buy physical, but at times I use ETFs to go short or even double short if I'm feeling extra crazy...
As far as HSBC is concerned, I don't have anything against their product, but I personally trade US ETFs, just because of the much, much larger volume (hence liquidity) available.
Thanks for the replies. Yeah, that's why I went for physical gold to build up a reserve at the beginning. The predictions of collapse of Western Banking were so hot at the time that I wouldn't trust ETFs. But it seems to me that such a global collapse has receded now. There may still be risk for individual European banks in particular, but nobody serious is talking about a systemic problem which could bring down the whole system any more, and Asian Banks are among the strongest. I have no big worries about HSBC in particular. So, rather than just buying physical and vaulting it I see benefits in having ETFs for the same reason as China Flyer. Mainly to do with trading and buying into short rallies. It's an entirely different play from stocking up on the physical.
So, if nobody thinks HSBC are too expensive, or otherwise untrustworthy (hah, a Bank, untrustworthy!) then I may take a punt.
I use this crowd. Gold Bullion, Investing in Gold Bars & Gold Coins - GoldCore.com Not because they're cheapest, but because I know them and trust them. They deliver to Hong Kong. You can sell back to them. Or if you prefer to sell elsewhere no problem, thats why we buy physical, eh! But best if product still in original packaging from source. You need to shop around a bit.
Remember, buying into an ETF is the same as buying shares of a trust owned by the biggest C's of them all, the BANK...!! Not backed up by any physical gold at all, the price can do the total opposite to the gold price and can easily go to nothing when everybody decides to sell up. The US "fed" has just delivered open ended QE3 which will ensure further destruction of the economy, so as AAIGUY said .......STACK IT UP.....!!! It will become real "money" again soon, as the World economies crumble and they naturally revert back to gold and silver as money.
With HSBC you can also buy paper gold directly from your bank account. I hold bullion for long term, but have used paper gold for trading and also for things like saving for HK tax. I put 15% monthly in there, then sell it towards the end of the year for my tax bill. Been doing this for years and getting nice returns as a bonus. With QE to infinity, I suspect this strategy will continue to work for quite some time.
Not all ETFs are the same. Some offer real asset backing (eg Lyxor/Soc Gen, and Blackrock I think). Many are indeed, just complex derivatives, some with alarming hidden +/- leveraging or counterpartyrisk.
Find a quality ETF and I cant see the point in the real metal; Expensive and awkward to hold.
Last edited by Joe le Taxi; 21st Sep 2012 at 21:11.
Provided it is a legal tender coin with a face value of say A$100, then my single experience when some similar coins were looked at on a random inspection, (not for 1 second did it appear random!), was that they merited no more than a stupid question of "what are these" and a glance front and back whilst they continued the search for whatever other items my honest face made them suspect I was concealing. Were such Australian coins delivered to you in Aus, there have been GST applied, if they were delivered/obtained abroad, a keen customs guy could deem them an import and require duty to be paid. Alledgedly, old 35mm film containers are just the right size for sovereigns & krugerands etc and fit the pocket nicely. As for holding physical rather than paper, there are problems with both. Most paper buys are not backed up by physical and as most have stated is good only for trading. With physical, good for the long term, but in the short term can be expensive and problematical. Buy/sell splits on smaller units like 1oz coins are quite large, as is the rate you pay per ounce. Conversely, you get the most gold for yr buck with the 1 kg bar with 2 options - physical possession or professional storage. With physical possession you need to consider do I put it in my own safe (and hope the sellers security of my name/address have not been leaked to the local armed robbery gang) or do I use a bank safety deposit box. In times of turmoil and unrest, when the banking system has been totally f@rked by the tw@ts like Bern@nke and his never ending printing press, then you may find access to your safety deposit box is denied. Similary, for the Armageddon scenario, a range of sizes is oft thought to be be more flexible. Some companies, and I don't wish to advertise here, offer possession of gold, but storage at their off bank sites in certain cities worldwide. They allow physical possession but be aware that the rigmarole of getting them to buy back larger bars is not easy. They have to test the gold to ensure that it is the real McCoy and not a clever similar core mass with 10mm gold plate. That reduces the buy back price. But I'm broke now, on my 3rd wife, had to sell all my gold, and as soon as the navy comes into port and she can start making some cash again, I have decided that short term pork bellies are the best investment opportunity for me