00:00 Speaker A

There are a few ways for investors to put their money in gold. It could be ETFs, it could be physical gold, it could be miner companies. Perhaps, let’s start with ETFs. How is the best way for some of the ETF exposure that you’ve seen and the inflows that you’ve seen into ETFs that are tied to gold?

00:27 Speaker B

Yeah, look, I think it’s important to remember that ETFs are physical gold. But the, the only difference between the ETFs and actually owning bars and coins is that you don’t have physical possession of the gold that backs gold ETFs. Somebody else looks after that. And that is actually an advantage for an awful lot of investors who see problems with, well, how do I custody this, where do I keep it, do I insure it, do I bury it in the backyard, put it in a safe, what do I do with it? ETFs take all of those problems off the, the, um, the plate of the customer. What they give you is exposure to movements in the price of gold. And that’s what most investors are actually looking for, rather than physically having gold in their hands and wondering how to look after it and where to keep it.

01:37 Speaker A

Okay. So those out there that are saying, okay, well, I’ve got my shovel in my hand, I was just about to go dig a hole so that I can put the gold in the backyard. What are some things investors should know and consider before buying physical gold?

02:01 Speaker B

Um, look, I think, uh, the, the problem with physical gold, buying bars and coins from your friendly local coin dealer is that typically, uh, there’s a fairly large markup over the value of the gold contained in the bars or coins when you buy, and frequently as much as 5%. And what the, what the coin dealers don’t always tell you when you buy from them is that when you come to sell to take your profits or to take your losses, they’re going to suffer a similar size haircut at the end. I don’t like the equation that gold’s got to go up 10% before I break even. The, the narrow trading costs that ETFs can give you and the relatively low expense ratios that gold ETFs can give you, um, to me, they’re a no-brainer as far as gold investments are concerned.