Dan Caldwell's  Instablog

A member of my group asked this very relevent question the other day. My response to him was that IMO at the present time investing in CEF was the better option, since CEF is audited for its physical holdings, as opposed to the ETFs GLD and SLV which are not audited.  Here's how I arrived at this decision:

Comex Gold was at $930. Add a $30 per coin bullion premium + approximately 3% S/H and insurance from a bullion dealer. This gave me a price of $999/oz. to buy physical gold.

Comex Silver was at $14.04/oz.  Add $1.00 for the premium on silver rounds (coins of the realm premium is even higher). Add another 3% for S/H and insurance to order coins from a bullion dealer.This gave me a bullion price of $15.49 to buy and hold physical silver.

I then plugged my price for gold bullion ($999) and silver bullion ($15.49) into the CEF Premium Calculator along with the live quoted ask price for CEF and the online calculator spit out a negative number, telling me that at that particular moment CEF was selling at a discount to the price of physical bullion.

Disclosure:  I hold a posiiton in CEF and pay attention to the CEF Premium Calculator tool and sell a portion of my CEF holdings when the premium approaches or passes 20% because past experience has taught me that the Fund will probably do a dilutive offering at a lower price in the next day or two.  I like to buy when the premium turns negative to the price of bullion.  (I added to my position last week at $11.26).

Also long CDE, GDX, FCX