Posted on 10/14/2010 8:04:49 PM PDT by FromLori
A mystery investor has paid a £750 fee and turned shares in an exchange traded fund (ETF) into physical gold. The ETF – or exchange traded commodity (ETC) - called Gold Bullion Securities, has a built-in facility that allows investors to swap their shares for gold, but this has never been used before.
The timing of the first transaction of this sort is likely to be related to the price of gold which has been hitting new highs on a daily basis. Investors who want to hold gold rather than shares in a gold ETF may be suspicious of global gold markets; have an industrial use for the metal like making jewellery; or have an investment strategy that requires holding physical gold.
Whatever the reason for buying gold an investor will pay a premium above the gold price to get their hands on it. Gold broker ATS Bullion in the Strand in London, said it would sell gold at a 4% premium to an investor buying a kilo bar. At the time of the conversation these bars were selling for £29,000 making the commission for buying a bar £1,160, more than the £750 flat fee from ETF Securities (although there are other costs).
Now that the facility has been used it demonstrates the difference between traditional exchange traded products and holding metal-backed ETFs. Investors holding these shares have a choice of selling them for cash or converting them into real assets like gold.
(Excerpt) Read more at citywire.co.uk ...
Special effects
ping
The guy was trading hog futures and they dumped about 200 hogs into his backyard, saying his buy contract matured.
Well you can buy kilo bars at spot including shipping from Tulving.com, so this is hardly a deal.
Any more of this that goes on will help my gold mine stock. They are going have to start digging to fill all the orders.
Yes strange that someone would do that isn’t it? I wonder how much and who it was.
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