Thursday, January 18, 2007

Buy Gold On Paper

Yes, The Gold ETF is coming.

The Securities and Exchange Board of India (Sebi) today cleared the draft applications filed by Benchmark and UTI Mutual Fund for launching gold exchange-traded funds, nearly eight months after the fund houses filed their draft application with the regulator.

Instead of actually trading or buying and selling real gold, GETFs, are basically an investment in certificates backed by gold.Based on the price of 1/10th (usually) of an ounce, ETF or ‘Gold-linked shares’ are traded on popular bourses.

Total trading in NYSE has been said to be close to $3.3bn in assets in ’05. NYSE remains the largest exchange to attract investors in gold ETF segment. Apart from the New York Stock Exchange (NYSE) in the US, gold ETF is also traded in bourses located in Australia, UK, South Africa , France and soon India.

Gold shares are apparently intended to offer investors a means of participating in the gold bullion market without the necessity of taking physical delivery of gold, and to buy and sell that interest through the trading of a security on a regulated stock exchange. This introduction of Gold shares is supposed to lower many of the barriers, such as access, custody, and transaction costs, that have prevented some investors from investing in gold.

What is an ETF? Ask or Index Funds beat Stocks or What is ETF

I will still be keeping my value in real gold that you can hold and feel in your hands! Oops! My wife hands, ofcourse!!
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