The recent fall in prices of the most precious of the metals led to an unprecedented demand for Gold coins, bars, jewellery, ETFS and mutual funds etc. BullionVault.com, that allows individuals to buy gold. It also offers storage in places like Zurich, London and New York on an annual storage fee of .12pc. This online gold trading company saw an increase in new accounts opened by new customers last month by up to 250 %.
Folks who seek exposure to Gold at current prices must think long and look to diversify with in the sector. Investing in Pure Gold Miner Funds compliments the investments in the physical bullion because in any of the past rallies, miners have always outperformed the bullion owing to their First Mover's Advantage.
The gold and silver mining ETFs and stocks are experiencing a down fall in prices since last few months due to the sell-off in precious metals. A pure play product form these broader markets like a Gold miners ETF has seen a beating of around 47 % in the last five months or so. The steep fall in commodity prices are known to all, however that does not mean that buying the yellow bullion has become easier and cheaper.
Most bona fide agencies including the British Royal Mint or MMTC from Asia are still selling physical quantities at a price which gas a sizable premium attached to it.
Considering a Gold Mining ETF will offer exposure to small cap pure gold mining companies and international diversification at low expenses. The small caps / miners tend to get affected more drastically with a larger shift either ways with every change in price of the metal.
Activity in the sector includes Global X GGGG where the fund issuers have declared a Reverse share Split procedure at a time when Gold mining fund is already at an attractive investment price and the current stress on it will surely get a breather to sail through the struggles perpetuated on the mining stocks.
This procedure entitles the shareholder 2 shares (post-split) in place of 1 (pre-split) share, effective on all shareholders as recorded on May 15th 2013. The new price will apply from May 17th 2013.
The reverse split will reduce the number of shares held but will increase the value per share. Therefore the total investment worth made by an individual remains unchanged in the whole deal. Another interesting concept that is a part of the above procedure is Fractional shares. This case arises when an individual has a number of shares that does not total to a whole number / multiple of two. A fractional share thus emerges, this will be exchanged for cash and in the event the shareholders make very little gains or are forced to earn a loss. The above scenario can be evaded by the stake holders by either purchasing more quantities or selling some shares in order to round off the holdings and come to a desired number. In any case investments in a Pure Gold Mining ETF must be phased out in stages.
Currently one witnesses a struggling period for a Gold Mining Fund, this trend is expected to continue amidst the dimness in prices of Gold and Silver, but the bear run can be turned into a buying time for investors who are projecting a long outlook.
Also the fall in prices of the precious metals has resulted in an exceptional demand to procure them and a rising demand always concludes into a positive price hike in future where the concept of withstanding Gold rally is still intact.
Global X Pure Gold Miners Fund [GGGG] delivers as per the performance of the Solactive Global Pure Gold Miners Index. The bench mark tracks a close to 24 pure Gold Miner stocks from across the world. Holding wise Canada, Australia, South Africa and UK are the heaviest with about 50% of the assets of this Gold Miners ETF coming from these countries.