Why is GTU down almost 4%?

[charliebrown]

Re: Why is GTU down almost 4%?

agree with most of this stuff Yesterday, GTU closed at 50.49, and now a gazillion new shares are now for sale
at 48.90. This difference is roughly -4.7%. That explains alot about the price decrease. With gold fever running, I'm sure these shares will sell quickly and once consumed, I feel the premium will once again rise to the 10% range, where it
seems to set most of the time.

I bought some GTU today, and will buy more tomorrow. Maybe I should have liquidated this morning at -3.5%?? moved to phys, and rebought, GTU in the afternoon, thereby pickup up a 1%??

I have been trying arbitrage between GTU and PHYS too, but have never seen the premium of PHYS lower than GTU.
They were nearly equal a few days ago at 11%, and now I'm kicking myself for not taking this deal, as I would have saved nearly 5%. I know that PHYS has a take possesion option. Is this why the premium is always above GTU?

[LargoWinch]

Re: Why is GTU down almost 4%?

One idea would be to short PHYS at a premium of 11.4% and buy GTU with a premium of 4.3%.

Also notable is the fact that GLD is up 11.05% YTD, while GTU is up "only" 8.35%.

[jmaxey]

Re: Why is GTU down almost 4%?

The slightly higher premium of PHYS is in my view due to two reasons: 1) It is a relative new fund that has had heavy promotion and press exposure as a physically backed metals fund; 2) the IDEA that one can take physical possession of the gold even though the minimum is, I believe something in the neighborhood of 400 oz. bars taking that option out of play for many small investors. I don't think GTU is as well known as it's sibling CEF but both have been around for a long time and are two of the original physically backed metals funds. It's my understanding that these types of investment vehicles are extremely difficult to set up in most countries for obvious reasons with Canada given it's rich mining tradition being the exception. The goldsmiths from threadneedle street are probably spinning in their graves. Perhaps some of our Canadian friends can chime in here.