Wt Physica Gold Discussion Threads

[bobp] 09/2/2009 17:38

45, Barclays are doing a Defined Returns Plan, well, several types actually, slightly off topic but if you were looking at moving the stuff u have in an ISA and don't need short term access to it then I would recommend them. They're little known, occasionally highly recommended in the pages of the FT, and are good to have to balance things out. With the markets as they are its a no brainer.
Hope this helps.

[manners2] 09/2/2009 14:21

is there any way to hedge the currency exposure?

[spob] 09/2/2009 12:29

the price will also vary depending upon buyer demand for the shares

wrong

[fortyfive] 09/2/2009 12:25

Back from the hols....slept very well knowing it was mostly in AU shares.. One point to add to the discussion is that PHAU and PHGP are shares and the price will also vary depending upon buyer demand for the shares. So add this factor to the currency movement effect. I just looked at my ISA and its now paying 1% ! so that's going into PHGP as well.

[kiwi2007] 09/2/2009 10:41

Taken my profits.. will watch..

[bobp] 09/2/2009 08:08

and here we go, only just opened, the ftse is dropping....and so is this!
Actually, another 8-9% and i may buy into it, but too high for now

[juju43] 08/2/2009 18:36

yep. be suspicious when all are so certain but sooner or later pgm will have their bubble

[bobp] 08/2/2009 18:15

so much talk in the papers/mags about gold about to rocket. maybe, but also maybe not. there are subtle factors to consider and just because shares start to slide, like i think they will v soon, does not necessarily mean that gold will go the other way (up)
there's no better ramper than someone stuck in a share/gold/hogs or whatever, who also has access to material that punters read.
if it was that certain don't you think the world would have already piled in?
i think there may be a pull back, i don't hold and i'm no shorter, i've just seen this cycle of rhetoric time and time before!

[bluebelle] 05/2/2009 17:20

machoolahan - 2 Feb'09 - 11:53 - 100 of 106

Thanks for that mac. Have added to my PHAU and bought LBUL also. Also added to my holdings of Softs. Seen nothing recently - Unilever this morning for example - to convince me that we have seen the end of the bear run in equities.

[abundance99] 03/2/2009 15:28

"I believe that sterling will fall against the dollar, and that the price of gold in dollars will increase..."

In that case buy gold. As I said before I own PHAU. You know how when you buy on Selftrade and the purchase appears in your portfolio with a value slightly below what you paid for it (to reflect dealing costs)? Well, when I bought PHAU the valeu of my holding lost around £18. That takes into account any transaction costs and the spread. My guess is that the transaction costs will be zero because PHAU and PHGP are the same. If you are buying with pounds it will cost you in pounds and that is the quote you are given. And, incidentally, if you own PHAU its value appears in your portfolio in pounds.

[bluebelle] 02/2/2009 13:56

scatty
I deal through Selftrade - ISA,SIPP and Dealing accounts. Have never had any problems : just put in the details in the usual way and the price comes up with 15 seconds to accept or decline.

[scatty] 02/2/2009 13:27

just to add a little to the discussion - I considered GBS (and GBSS - the sterling equivalent) before opting for PHGP/PHAU. I think GBS (gold bullion securities) operate in the same way, but is technically not an ETF. It is also not ISA-allowable, and has a slightly higher management charge than PHGP/AU. GBS is handled by Lyxor. PHGP trading through my broker seems to be subject to dealing delay. Spreads seem similar to GBS. Anyone have other experiences/views??

[bluebelle] 02/2/2009 12:02

Thanks everyone for your explanations, and patience !!!

[machoolahan] 02/2/2009 11:58

Indeed - noted on one of my posts from last week, also have to consider the spread (on last check they were similar though).

[kiwi2007] 02/2/2009 11:56

There may be currency transaction costs involved if you're buying and selling phau from a £ account. In that case phgp would be best.

[machoolahan] 02/2/2009 11:53

Bluebelle. If you are starting and ending in £s both are the same.

Please do the thought experiment I suggest above. It will only take you a couple of minutes.

Though if you believe in the developments you foresee above - LBUL would make you more, 2x the gold increase against the $ + the improved $/£ rate as you exit. Higher risk though, so DYOR and all the usual caveats.

[bluebelle] 02/2/2009 11:40

So, to get back to my original question, if, during my investment time scale, I believe that sterling will fall against the dollar, and that the price of gold in dollars will increase, am I better off in PHAU or PHGP ?

[scatty] 02/2/2009 11:35

And to add a little more, whether PHAU or PHGP your holding of gold is identical. BUT you would expect the value of that gold in dollar terms to rise if the dollar fell against a basket of currencies, so that the purchasing-power of the gold holding is maintained (lots of other issues too, e.g. inflation, opportunity cost of income producing assets etc)

[machoolahan] 02/2/2009 11:10

It doesn't make a blind bit of difference what the dollar does if you are buying some gold in £s and then later selling gold into £s, if it goes there via $s, Yen, Roubles, it makes no odds.

All that matters for PHAU or PHGP is £ vs. gold. The "move" differently because one is in $ and one is in £s. But you don't hold any $ - when you sell either it will get converted into £s at which point they are exactly the same.

See what I mean? Just do a thought experiment where you buy some of each and then the price of gold AND the £/$ rate changes and see what you would expect out of each one at the end.

[bluebelle] 02/2/2009 10:34

scatty,

So, to get back to my original question, if, during my investment time scale, I believe that sterling will fall against the dollar, and that the price of gold in dollars will increase, am I better off in PHAU or PHGP ?

[scatty] 01/2/2009 10:19

Bluebelle >> whats the problem? PHGP is denominated in £, PHAU is denominated in $. If the £/$ rate changes, the inverse factor will need to be applied to the PHAU/PHGP quoted price. Thus if the $ gold price halves, PHAU loses 50%. If £ depreciates by 50% against $ in the same period, the PHGP price will show no change (as the 1/0.5 factor applies to the PHAU $ price when converting to £ basis for PHGP). There is no reason why PHGP and PHAU should move in tandem. If dollar price of gold is static, the relationship would entirely depend on currency movement - and any movement will be the inverse of the other - one showing loss, while other showing gain! In the long term, you would hope that any sustained weakness in the dollar would result in a higher dollar price of gold - which will provide some support for sterling based investors when selling

[bluebelle] 30/1/2009 15:30

Ash

I understood that - and a very lucid explanation it was if I may say so! - but I still can't see why the two prices (PHAU & PHGP) don't move roughly in tandem with one another !

[ashbox] 30/1/2009 13:56

Bluebelle - I thought my example above explained that quite well!! There is no difference in performance against gold.

[bluebelle] 30/1/2009 12:37

Ash

That's very interesting but how does it explain the difference in performance between PHAU and PHGP? I still can't work that one out !!!

[ashbox] 29/1/2009 17:23

v - It's the same as if you owned a 1 oz gold coin, this would have been worth approx. $850 12 months ago and is still worth approx $850 today. If you had gone to the USA to sell the coin then you would have got the same price 12 months ago as today whereas in the UK you would have got £425 12 months ago and £594 today. If you decided to reinvest your original stake of £425 plus your 'profit' of £169 in gold then you would still only get a 1 oz coin. In other words, there is no 30% increase.
Also, your £425 would have bought you $850 12 months ago and £594 will buy you $850 today, so again, still only 1 oz gold.
You are correct in assuming your physical sterling has increased and you have a greater buying power for many things (except dollars/gold), but this would be the case whether you bought PHAU or PHGP or if you had just bought dollars, held them for a year and then changed them back to sterling.
Remember, the aim of buying either of these ETF's is to gain by an increase in the price of gold, which means gold greater than $850 in the above example.
If currency speculation is your aim then use a different vehicle as the fluctuating gold price can affect that!