:clapping::clapping::clapping:
I share the same views. Short term ---> ETF, long term ----> physical.
I share the same views. Short term ---> ETF, long term ----> physical.
I am surprised to see that everyone on this thread favour ETFs. In my opinion, the fundamental reason for investing is gold is as a hedge against extreme devaluation and possible loss of faith in paper and electronic money. It is OK to buy a gold etf for short term (as I myself have done in the past) but not as a long term store of value. This is because ETFs do not keep equivalent amount of gold as the number of units. Theoretically if I buy a unit of GoldBEES, Benchmark is supposed to give me one gram of physical gold. Since Indian regulations are stricter, Benchmark may well have equivalent amount of gold, audited and certified in their custodians vaults. But that is not the case with the gold ETFs in the West, the most popular and most notorious of which is "GLD" fund.
I agree that normally we are not going to run to GoldBEEs seeking our gram of physical gold. But it can happen in case of extreme devaluation of paper currency. Major currencies of the world, USD, Eur, JPY and GBP are all under risk. Value of currencies is a matter of confidence so a loss of confidence in multiple currencies simultaneously will result in investors and ordinary people selling all currencies simultaneously. In such case gold, precious metals and other commodities will be gainers. If we lose faith in the rupee, we may have to ask Benchmark to cough up our gold and if they are not able to deliver, the GoldBEES will become another piece of electronic junk.
This brings us back to the logic of investing in gold (long term). Only physical gold can provide you the kind of security needed at that time catastrophe. So please continue to trade in GoldBEES, but don't invest!!
I agree that normally we are not going to run to GoldBEEs seeking our gram of physical gold. But it can happen in case of extreme devaluation of paper currency. Major currencies of the world, USD, Eur, JPY and GBP are all under risk. Value of currencies is a matter of confidence so a loss of confidence in multiple currencies simultaneously will result in investors and ordinary people selling all currencies simultaneously. In such case gold, precious metals and other commodities will be gainers. If we lose faith in the rupee, we may have to ask Benchmark to cough up our gold and if they are not able to deliver, the GoldBEES will become another piece of electronic junk.
This brings us back to the logic of investing in gold (long term). Only physical gold can provide you the kind of security needed at that time catastrophe. So please continue to trade in GoldBEES, but don't invest!!