red, find it within yourself to forgive my ignorance and being sloooowwww on the uptake with understanding ETF's. I prefer equities myself, but that is a tangible thing and comes from an earth, bricks and mortar background.
I realised today that it might grate on your nerves that the 'gold' forum has been taken over and is used in the (almost) indiscriminate manor that it is. for the nymph who insists on moderating me, HC might need to allocate a forum for general discussion - how about being constructive and let redback have the gold forum back, and you create something called "market ecomony" or "financials" or something
'gold' is the ETF of the ASX. my cap is in hand to redback.
'gold' - not the yellow stuff, nor the noun nor adjective, is a listed ASX instrument to which you refer. type it into commsec, or asx or whatever. it is a listed instrument that can be traded like any other ASX equity.
it lists 4,727,588 total class issue, with a market cap (as of today) $556.86M. Given it states 1/10oz gold rights stapled to each security, in theory should have 472,759 ounces of physical allocation (which it clearly says it does).
'gold' (the ETF) is by definition 1/10th an oz of gold equivalent, less fees. can be found here -
http://www.etfsecurities.com/au/welcome.asp ; or http://www.goldbullion.com.au/au/index.php?noMsg=true
(as at 4th November, each 'GOLD' (the ETF) is equal to 97.796% of 1/10oz gold, in AUD POG). Fees account for something of the difference - it employs directors. Hence returns on trading 'gold' the ETF should be no more difficult to the TA or FA you put into equities - in fact a whole lot easier (hahaha ... right). Comparing ETF's to equities is more than marginally unfair on both, and it comes back to risk.
Working out the ETF asset backing is a no brainer, and earnings per share is by calculation only using the above and the AUD POG. Forecasting the AUD POG is the only tricky part. There won't be a dividend however, because there is no income stream, and likewise cap raisings will never be an issue. Interesting it might be though that on days like today, it might be a slight premium for entry - not sure how the buy/sell table would work - it is would be very similar to a real time futures type deal with sellers being those who are shorting gold or happy to exit. You are trading the immediate future of the POG.
insofar as their being a negative correlation between the POG and the equities, not sure I can agree with this at all. Entry into equities is pure TA/FA, and ETF's have very little of either.
As for comparable returns, ETF's are fixed only by the price of gold. In many instances (even recently), returns in equities far exceed the performance of the ETF.
But to each their own.
ETF cycles are longer term and volatility less magnitude(as you'd expect fromt he POG, but much conjecture on this in recent forum discussions). Providing AUD POG goes to $1650 you'll get your 50% return from %110 if you entered recently. There are very few ETF's, but there are many more equities to research. 1700 of around 3200 listed ordinary stocks trade at least weekly.
See chart below -
MACD's on the up, slow stoch looking for some good short term capital gain.
From a TA perspective, GOLD the ETF looks very good. But all the necessary consideration really is listed within redback's update posts. Anyone not picking an AUD peak around Feb/Mar2010 is pretty foolish (even without looking at these charts). Break out today above 195EMA at this time of year looks like a reasonable thing to get into. You need to remember to divide the USD POG by 10 and then divide by the AUD:USD exch rate and then multiply by 0.98.
Possible scenarios for the ETF - USD POG $1200; AUD 0.9 = AUD POG $1330 = ETF $130.3 USD POG $1300; AUD 0.8 = AUD POG $1625 = ETF $159.3
I can see another late USD/GOLD rally prior to the final demise of the USD as it gets back to it's box. US job stats due out this week Friday might tell more of the story, unless everyone is happy believing real GDP has recovered ...
Anyhow, clear off you lot, and find yourself another forum to squat in. 'gold' should be for the ETF - nymph, find a place where you don't have to keep moderating me, and somewhere else for all the comic strips to get posted in.
