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Strategies & Market Trends : Natural Resource Stocks -- Ignore unavailable to you. Want to Upgrade?

To: isopatch who wrote (17449)	11/11/2004 1:55:05 AM
From: The Vet	Read Replies (1) \| Respond to of 108920

Iso, I already use a gold ETF in conjunction with my Australian trading account. The symbol is GOLD.ASX and it trades in AUD with 1/10 ounce per share. Personally I use it instead of cash and move in and out much as I would cash. It also makes a good hedge against the Aussie dollar. It very closely follows the POG with a slight premium to spot. The advantage over other instruments is that you can buy or sell in any quantity just for a standard on-line brokers commission and I have never had any problem with buying or selling at or close to spot equivalent even though the liquidity isn't very high. Apart from buying and selling stock, the Australian version allows you to buy physical gold on the spot market through several major market makers 24 hours a day and have it converted to normal trading stock in GOLD.ASX for a 0.1% fee. You can redeem stock for good delivery bars for a flat fee of $100 AUD regardless of quantity. (you have to make the number of shares up to whole bars of course). It is this easy conversion of stock to physical and vice versa that ensures the value of the stock matches the price movements of actual metal. If it strays at all the arbitragers will quickly jump in and bring it back into line. I really don't know if the US version will work the same way but you can see how the Aussie one operates here (it is quite detailed - but you have to pretend to be an Aussie). goldbullion.com.au