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)

Catching a falling knife attempt: buying more BlackRock Gold and General

Today I invested another £250 into the BlackRock Gold and General fund despite it's dreadful performance. To invest I had to place the order before 8am and the transaction went through at midday.


Where my holding stood yesterday

I've already invested £2,250 into this fund. Unfortunately - judged on yesterday's unit price - my investment has lost 20% of its value (£466) since I started buying. What remains had a value £1783.48 as of yesterday.

BlackRock Gold and General: -10% in a week -40% from 2011 peak

The performance of my BlackRock Gold and General fund holdings has been dire.  It is down around 10% this week and nearly 40% since it's peaks in September 2011.

The 25% drop over the last year appears almost reasonable next to these two figures!

Over the year:

Why does Fresnillo price jump at the end of trading?

The share price of silver miner Fresnillo can leap more than 3% at the end of the day as it did on 8 May 2012 and 4 May 2012. I think it happens quite often - although it didn't happen today.

On 4 May it jumped from 1500p to 1546p or 3%.

On 8 May it jumped from 1396 to 1449 or 3.7%.

I bought gold today

On the London Stock Exchange it looked like Physical Gold ETFs were being bought.
The busiest was Source (SGLD) with £67 million bought vs £66 million sold.

Fear mismatch? 10 month low for Sterling gold ETF not 4 month

I suppose this should be seen as a good thing -another proper buying opportunity for gold. But the reason it's a buying opportunity is because it's scary and I'm not immune to that fear.

However there is a mismatch, the media chat about impending huge falls in the gold price is nothing like it was back in December 2011 - at least not yet - but I think it's because in dollar terms the lows still aren't below the December 28 $1,523 low.

Sterling gold falls under £1000 oz for first time since 2011

The price of gold has fallen below £1000 per ounce (oz) today the lowest its been since 2011.

Gold spot price over the last six hours

According to the gold spot price provided by BullionVault while gold was selling at just above $1,600 per oz the sterling price fell to just over £992 per oz (later under £990 as per chart above).

Are Hackney's streets lined with gold?

Three new 'cash for gold'/pawnbrokers have opened up next to the Pembury Estate in Hackney since the riots in the borough last year. This means there are now seven stores offering to buy and sell gold on Hackney Central's high street the Narroway. 

The newest players in this gold rush are TGS Pawnbroker (pictured above) which looks up Clarence Road, the scene of pitched battles with the police in August last year. 

Should gold cost £112 or 2p for grassroots investors?

A "grassroots" gold investor in the UK would have to pay a minimum of £112  to get on the bottom rung of the gold investment ladder.

Meanwhile a grassroots gold investor in India could pay less than 2p per day to make a gold investment.