Buy or sell as gold price plummets?

Can I really make a sensible decision about whether to buy or sell now?

I've got about £1000 standing by but I'm not sure I'm aiming to buy anything yet, or sell anything.... but I might have changed my mind by tomorrow.
 

 My small portfolio, which now includes one share of Personal Assets Trusts (PNL), looks pretty shredded at the moment.

As mentioned before, the worst perfomer, BlackRock Gold and General, was a kind of accidental investment.

Now physical gold losses have racked-up too I need to remember why I made this investment in the first place and decide if really want to cancel these positions.

On April 10 Goldman Sachs analysts said the gold price would fall to $1,450 by the end of 2013 and carry on falling through 2014 to $1,270 an ounce. I didn't know what to do then - so I didn't do anything.

And the last time I looked gold was trading at £1,351. I still don't know what to do but I'm not as worried as used to be when I was looking at this stuff all the time.

I have tried a couple of times to work out what I am doing and why, but due to no longer looking very often it feels a bit like reinventing the wheel.

The first attempt looked at whether I should take action frequently: http://goldetfinvestor.blogspot.co.uk/2012/01/gold-price-falling-on-monday.html

The next tried to assimilate the advice I got: http://goldetfinvestor.blogspot.co.uk/2012/01/identity-crisis-at-gold-etf-investor.html

And that was the nearest I got to working out how to get through times of indecision... not very far.





I don't think anything has changed in my rationale - which was originally more to do with educating myself than making money (or losing it for that matter).

It may be another 10 days or another 10 years before I can get the same price for these shares.
But how much gold will be left as fees chip away on the gold they contain? I'll have to work it out. 

Portfolio: not much changed

Not much has changed  since a couple of weeks ago - September 18 2012 (Have I made money yet?) - and although my account is up a little, I still haven't properly worked out if I'm up on when I first invested as selling out and buying back in again added some costs!

Odd moves price moves for ETF Securities' PHAU and PHGP gold

It's  been a while since I looked at my tiny portfolio of physical gold ETF shares (PHAU) and BlackRock Gold and  General units.

When I do I usually see the kind of thing described here -  what I've started calling a price anomaly when it probably isn't. Generally, because I've left it so long,  I've forgotten what it was I found out the last time.

Anyway, I'm doing it again but as it's near midnight on Sunday I'm sticking to the basics. 

Have I made money yet?

My Hargreaves Lansdown account only has two holdings: ETF Securities physical gold ETF (PHAU) and BlackRock Gold and General fund.

As far as I can remember this is the first time since I started investing in gold and gold related shares that I have seen it in positive territory:

The BlackRock fund is still down a but I have held it longer than the physical gold ETFS and so it would be misleading to see it as a less successful investment.

Basically I sold all of my PHAU shares back in December 2011 (at a £250 loss) and couldn't make up my mind whether to buy in January and didn't own any again until March when I paid £1066 for 10 shares and  then again on April 4 2012 - 10 shares for £1009 and then another 10 shares for £978 on May 9 2012.  All together  my ETF holding is now up £146 so I haven't regained the original loss.

What I might try and work out is whether I would have lost less if I had simply held on and bought more.

Another odd PHAU price movement

On Wednesday 22 August 2012 the price of PHAU jumped in the morning on one  small trade when markets opened. PHGP the sterling version used by small investors didn't see the same price move.

All quiet at the Gold ETF sand castle this summer holiday?

There may be some calm in the gold markets before a (positive) storm according to people quoted in the Telegraph but summer holidays can be pretty dangerous.  

Another identity crisis at gold ETF Investor - fund or ETF?

This blog has had an identity crisis before.

There was another one last week: why do I invest in a fund rather than an ETF when it comes to gold mining companies? I only asked myself this question after seeing a piece on gold miner ETFs in Moneyweek - the inconsistency hadn't occurred to me before!

ETF Securities replies to "spreads widen dramatically" claim

ETF Securities has replied to Gold ETF Investor's questions about spikes in the spreads (trading costs) of one of its most traded physical gold ETFs.

Figures produced by London Stock Exchange each week calculate 'time weighted' spreads. In the week ending 13 April 2012 a handful of ETF Securities products saw their spreads spike.

Those listed by Gold ETF Investor were:

PHGP: up to 1.26% from 0.14%
SGBS (ETFS Physical Swiss Gold): up to 2.41% from spreads between 0.25%-0.6%
PHSN: up to 14% up from 2.3% the week before.

Very odd price crashes for gold stocks on Friday on London Stock Exchange

Prices drop in final trades

Despite Friday's massive rises for precious metals the shares of a number of gold and silver miners trading on the London Stock Exchange saw their closing prices drop sharply.

Fresnillo (FRES) shares closed down more than 4% after a one-off trade. Randgold Resources (RRS) and African Barrick Gold (ABG) also saw their prices plunge from daily highs. 

This may be normal after a volatile day but it still looks odd. These kinds of moves  have been noted on this blog before (here and here) showing that the share price of Fresnillo tends to jump at the end of trading days. 

ETF Securities physical metal spreads widen massively in April

click on chart to enlarge

London Stock Exchange statistics show that spreads of a popular physical gold ETF  - the ETF Securities Physical Gold £  with the LSE ticker of PHGP  - widened to 1.36% in the week between 10 April 2012 and 13 April 2012.


In the same week two other ETF Securities products also saw massive spikes in spreads. The most dramatic commodity ETF spread was ETFS Tin (PHSN) which saw its spread widen to 14.77% when it was (already quite wide) at 2.3% the week before.

Also (on the chart above) ETFS Physical Swiss Gold (SGBS) saw its spreads widen to 2.3% for the same period when they were usually between 0.25 and 0.57 in the other figures I looked at.

(Update) Drugs vs gold in Peru - how illegal is gold getting?

The front page of last week's Mining Journal has a story titled: "Mining experts call on Peru to fight illegal gold"

The report came from Peru-based Macroconsultant and could be compared to a report form the BBC  about gold over-taking drugs as the commodity of greatest interest to criminals.

The report said one in five ounces of gold from Peru were illegal but said that government efforts to tackle the problem should focus on the entire supply chain with the report's author Elmer Cuba saying: "It should take advantage of the existence of information on merchants and exporters of gold, which do not exist for the drug trade."

The scale of the problem in Peru has seen illegal gold miners take on police in pitched battles. Here's a BBC video about the problem in Columbia.

Unrest and fear also surrounds legitimate mining firms particularly Newmont's operations in the Peruvian region of Cajamarca and Xstrata in Espinar.

Odd price moves on physical gold ETFs: SGLD, PHAU and PHGP

The gold price dipped below £1000 per ounce again this morning with both ETF Securities dollar and sterling etfs dropping as the dollar index spiked (above) and stock markets bounced starting in the US, may be inspired by US gains on  G8 and talk of Eurobonds.

But this is an excuse to post some odd physical gold ETF price moves from the recent past... however it starts with another mention of the common phenomenon of Fresnillo's price jumping as it did  at the end of trading yesterday (pic below) but peculiar price leaps in gold ETFs (listed below) seem to have calmed a bit - for now at least.

Gold back over £1000 per oz - will it stay there?

As the price of gold tumbled earlier this week I mentally scrambled for the reasons why I had bought the stuff in the first place.

Yesterday and today's price rise - which took gold back over £1000 per ounce - eased my anxiety but there are still a number of issues I need to look at.

Source buy backs - not trading!

I have been talking about large volumes of shares being traded on Source's physical gold ETF on May 9 2012 but it looks like it was a "buy back". I don't know what that entailed. I'll see if I can find out.

Retail gold ETF attracts 10 fold more buying than selling

As the gold price continues to fall I rather urgently need to assess my position. However some UK retail gold investors seem to be pretty clear that today presented a buying opportunity. 

The (allegedly) most popular physical gold exchange traded fund for retail investors -  the ETF Securities sterling denominated fund with the London Stock Exchange ticker PHGP -  has seen buyers spending nearly 10 times more than sellers have sold today. With £5.2 million worth of shares bought by investors compared to £650,000 worth of shares sold. (The most popular retail gold ETF? dealt with below)

(Click on images to expand them)