Author Topic: SGOL ETF For Gold Allocation: What are the risks?  (Read 4141 times)


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Re: SGOL ETF For Gold Allocation: What are the risks?
« Reply #15 on: February 09, 2012, 12:18:37 PM »
What tax and other issues are there?

I called one of my contacts in Switzerland last night that is very familiar with this fund and Swiss banking financial products. He also specializes in servicing American clients, is a SEC registered financial advisor, and has been in the private banking business for over 20 years.

He stated, once again, that the ZGLD fund should not be bought by Americans. For one reason it is not registered in the states so it is subject to much higher taxation as a foreign investment company. This leads to a lot of risks for people that buy the fund. Secondly the bank does not want to deal with American clients so you are taking risks of buying a product where the issuer doesn't want your business.

Who is "strongly discouraging" it other than you?

I'm just telling you what I know based on what several people inside the industry have told me. Zurich Canton bank is a great institution, but they don't want to deal with American clients. They probably won't even talk to you if they see you are calling from an American area code on your phone.

And again it's still an ETF. So you still have virtually the same ETF risks such as it being in street name, proving ownership, etc. just like the other ones SGOL or PHYS have. So not only are you still stuck with the ETF problems as others, but you have the additional problem of investing in an unregistered product and a bank that to doesn't want your business!

« Last Edit: February 09, 2012, 12:21:47 PM by craigr »

Ad Orientem

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Re: SGOL ETF For Gold Allocation: What are the risks?
« Reply #16 on: February 10, 2012, 09:14:13 PM »
...Probably the best form of paper gold, with the least layers of intermediaries, is the Perth Mint Certificate or Mocatta Delivery Order as that is specific title to a specific claim of assets (if allocated).  Very easy to transport across borders too...

...But, Hong Kong is the next best place for storing gold after Switzerland.  They even sell gold in ATMs over there!...

I concur with your opinion of the Perth Mint.  Right now I think that's the best bet for overseas gold. 

Re: Hong Kong I'm a bit more skeptical.  Hong Kong works well at the moment because for the most part they are left alone to do their thing.  But Hong Kong IS NOT an asiatic Switzerland.  It is part of the People's Republic of China.  And the PRC is not a democratic state with a strong history of respect for the rule of law or property rights.  Nor are they a neutral state in foreign affairs.  Point in fact the PRC's foreign policy is, if perhaps not hostile to ours, at least less than friendly.

Is Hong Kong a safe place to do business?  On a near term basis I think so.  Long term I am not so sure.  If your looking for an uber safe place to stash gold I would shy away from anywhere that is run by an authoritarian police state with a history an adversarial relationship with our country.
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