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Gold/Mining/Energy : Blue Chip Gold Stocks HM, NEM, ASA, ABX, PDG -- Ignore unavailable to you. Want to Upgrade?

To: Eva who wrote (23185)	10/31/2010 3:20:33 AM
From: bull_dozer	Respond to of 48092

Yes. You are right. HRN: It seems a lot of money is flowing into the Sprott Physical Gold Trust (PHYS). Eric Sprott: As it applies to US residents, the tax rate on a capital gain in the Sprott Physical Gold Trust is 15% today whereas if you own the ETF, because gold is considered a collectible by the IRS, the tax rate is 28%. That’s a big reason for people to choose this vehicle versus an ETF. In addition to the tax benefits for US investors, the gold is held at the Royal Canadian Mint in Ottawa and to some people in the US that’s a good thing, because they’d like to see it out of the country. Also, the trustee is not a levered financial institution. The trustees for the gold and silver ETFs are levered financial institutions and therefore, when you have leverage there’s always potential risk. Of course, the reason we started it was that a lot of people realized there’s so much paper gold around that when you go to claim your gold it’s not going to be there. HRN: I understand there’s a premium of between 5% and 10% for shares in PHYS over the spot price of gold. Eric Sprott: We wanted people to be able to literally get their physical gold, so there’s a mechanism where, if you can buy a bar, which is 400 ounces, we will deliver it. The physical quality of it — the knowledge that the gold is there — in addition to the tax advantages, creates the premium. I think it’s justified. There are certainly no other North American vehicles where you can get physical gold. That’s why we created this vehicle. seekingalpha.com