gold silver etf's made easy for simple foke like myself

[blindguy]

let me see if i get this right.  you buy gold or silver etf's  with your currency. the paper will say you own say 500 ounces of gold. you can not ever have your gold. in most cases your gold does not even exist. then you sell your gold that does not exist to someone else. this person then sell his gold that does not exist to someone else. and so on. does this sound right so far? if the gold or silver in most all etf's does not exist can i buy it with currency that does not exist also?  when i was a kid in the late 60's (yes i know i am old) a company came to the schools to sell one city block of rain forest in south america i assume to save the forest. for $5 i bought one and so did all my class mates. i have the paper saying i own it. i hope no one is using my land. i also bought a star in the mid 1970's. i have the paper to prove it.  so for all you lovers of etf's do not get mad as i am just having a little fun with you this morning.  but is anything i said about etf's not true?  jim

[HawkHybrid]

3 hours ago, blindguy said:

the paper will say you own say 500 ounces of gold

 

you do not own 500 oz of gold.

you own the value of 500 oz of gold in currency.

the gold equivalence is just a barometer to work

out how much currency your paper asset is worth.

 

HH

[vand]

All ETF prices as far as I'm aware are expressed per unit. When you buy £100's worth of an ETF whose price is quote at £50 then you buy 2 units. This way it's easy to see how many units you have accumulated and your average price.

[Stuntman]

Yep.  You buy units in the ETF. 

The ETFs in invest in say that they do actually own the PMs, and they publish a daily audited statement with bar serial numbers and their weights.
I take this at face value, maybe I'm quite trusting.  I think you have to have a degree of trust somewhere along the line 😊

[Bumble]

It depends to some extent on the ETF. The biggest one, GLD, is open-ended and has to buy and sell gold in order to maintain a quantity equal to the value of the fund. These inflows and outflows to the fund are reported and are an indicator of investor sentiment. The Sprott fund, PHYS, is a closed-end fund. A quantity of gold is stored with the Canadian mint and the units trade at a price that at any given time may be at a premium or a discount to the value of the gold. The units are redeemable as bullion.

There are, of course, lots of other ways of owning gold. ETFs are probably better thought of as a trading vehicle than a form of ownership.

[Michal]

Remember who is GLD custodian when planing to buy it, asses risk when buying, always. 

[Chronix]

So when I look at current gold price on lets say Kitco app, am i looking at physical gold value or ETF? or both?

[vand]

9 hours ago, Chronix said:

So when I look at current gold price on lets say Kitco app, am i looking at physical gold value or ETF? or both?

spot price per oz

 

It's not rocket science. If you want say £10,000's worth of exposure to gold in physical form you buy (10000/spot price) in number of ounces. If you want the same exposure in ETFs you buy (10000/unit price) in number of units.

[blindguy]

a lot of great info here. i am old school and like my gold in my hands. i may be wrong but it feels so right when i am holding the gold.  jim

[Bumble]

There are several things that are called the price of gold. Kitko shows the spot price, which is the price you pay if you want your gold right now. There are also futures prices, which is what traders are mostly interested in. The CNN commodities page shows a futures price. There may also be divergences between the prices on London (LBMA), New York (Comex) and Shanghai (SGE). It is usual for the futures prices to be slightly higher than spot. This situation is called 'contango'. If the spot price is higher, this is called 'backwardation' and may indicate a shortage of supply.