STOCK MARKET WATCH -- Friday, 6 December 2013

[Demeter]

10. How to get $100 discount on an ounce of gold

I FIGURE IT'S A SCAM OR MAYBE A JOKE...

http://www.marketwatch.com/story/how-to-get-100-discount-on-an-ounce-of-gold-2013-12-04?siteid=YAHOOB

When the light turns green and the dull-witted motorist in front of me just sits there, I’ll wonder if he’s worried that the light isn’t green enough. With the price of gold about 35% off the all-time high set in 2011, investor sentiment is bleak — but for shareholders of Central Fund of Canada, a closed-end fund whose portfolio consists of gold and silver bullion, it apparently isn’t bleak enough.

The fund CEF had a net asset value — the intrinsic worth of the gold and silver it owns — of $14.29 a share on Monday, but its closing share price that day was $13.16, almost 8% lower, according to investment researcher Morningstar Inc.

For anyone who bought the fund that day, it was like buying gold GCG4 for about $100 an ounce less than its $1,222 closing price.

This discount to NAV isn’t the largest that Central Fund of Canada has ever had, but it’s certainly an outlier. Looking at average monthly deviations from NAV to smooth out the spikes, the discount has been about 5% for two months, far wider than for most of the last five years, a period in which a 5% premium has been the norm...


MAYBE PEOPLE ARE WONDERING IF PHYSICAL GOLD IS REALLY THERE, AND WHETHER THEY WILL EVER SEE IT.