Gyroscopic Investing

it seems like there is often a significant disparity on a day to day basis between the price of IAU and the price of gold.  is this anything to be concerned about?  is GLD better for some reason?  thx very much.

PPConvert wrote: it seems like there is often a significant disparity on a day to day basis between the price of IAU and the price of gold.  is this anything to be concerned about?  is GLD better for some reason?  thx very much.

Normally, IAU trades 8-10 cents above GLD, and this disparity has been stable for a long time.

I don't know that one is better than the other.  Someone else may be able to offer some meaningful distinction.

thanks.  i was less than clear.  i was primarily referring to the difference between the ETF prices and the prices you see listed for gold bullion.  in other words, is one losing out on returns by holding the ETF's rather than physical coins for some reason?  i would think not, but i have noticed a difference in the prices between the ETF's and bullion lately.

The ETFs erode over time due to their ongoing expenses (about .4%/year - which they pay by taking that much gold from you).  So if the price started exactly at 1/10th of 1 oz of gold, after a year the price would be only .0996 of an ounce of gold.  Another way to put this is if you start with 1000 1 oz coins, after 1 year they'll have taken 4.  Over many years, this will add up and cause price drift (down). Gold coins you physically own won't erode, but paying for insurance or storage has the same sort of effect.

Just some other quick differences between GLD and IAU is their expense ratios as well their custodians. GLD’s custodian is HSBC and IAU I believe is JP Morgan.