Central Fund of Canada (CEF) - Safest Way to Own Gold

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h2oBoy's picture
h2oBoy
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Central Fund of Canada (CEF) - Safest Way to Own Gold

I recently read about CEF as the best way to own gold without taking possession. Further research seems to validate this thinking. Has anyone else invested in CEF or have any thoughts? I have an account in a Canadian bank that would enable us to stay in Canadian $ and protect against US$ devaluation as well.

For investors that prefer not to hold the physical gold, yet place a high value on the safety of their investment vehicle not to default, I recommend the Central Trust of Canada (CEF) or its all-gold counterpart, the Central Gold Trust (GTU). Unlike the popular ETFs such as GLD and SLV, these funds do not lease out your gold and they always maintain 90% or more of assets in unencumbered, segregated and insured, passive long-term holdings of gold and silver bullion.

http://www.goldstockbull.com/articles/central-fund-of-canada-cef-safest-way-to-own-gold/

ao's picture
ao
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CEF pros and cons

I don't think CEF is a bad choice, especially if it's in a taxable account.  I ruled it out for myself primarily because of the hefty premium (which contrary to what the article says is actually more than the premium on physical bullion).  Also, after the fiasco with the Canadian energy trusts, I'm not particularly trusting of the Canadian government's future policy decisions, especially as they relate to non-citizens (of Canada).  Also, in the event of confiscation or some other US government anti-gold action, US regulatory authorities could get CEF delisted from the AMEX.  I wouldn't touch SLV or GLD with a ten foot pole but for trading, there are other, more fiscally sound ETF options include the Swiss precious metal ETFs, SIVR and SGOL.  But there is no substitute for physical bullion.  

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Travlin
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h2oBoy Did you check our

h2oBoy

Did you check our Sprott's other metal funds PHYS for gold and PSLV for silver?  They are pure metal plays and may, or may not, offer an advantage. I own both and like them.  Do watch for a premium over NAV with any investment.

Travlin 

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livsez
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IRA

I've maintained a core position of CEF in my IRA for quite some time now.  But as ao stated, I prefer physical bullion over everything else. 

Ken C's picture
Ken C
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CEF

I too have a good amount of CEF in an IRA account. It has done pretty well over the last couple of years.

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capesurvivor
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insider selling

Check out the recent huge sales of PSLV by Sprott insiders.

CS

Travlin's picture
Travlin
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Source?
capesurvivor wrote:

Check out the recent huge sales of PSLV by Sprott insiders.

CS

A link would be helpful.

Travlin 

capesurvivor's picture
capesurvivor
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site

Sorry,

I read so many damn sites every day I forget where I saw what.Undecided But I found it again:

http://kiddynamitesworld.com/pslv-sprott-files-to-sell-sold-to-you-sucka/

 

CS

Travlin's picture
Travlin
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Thanks Cape.  I'll give it

Thanks Cape.  I'll give it a hard look.

Travlin 

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capesurvivor
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pslv

Travlin,

When you look, you'll see that they registered to be able to sell, did not sell yet. I did not mean to misrepresent their actions but i consider them a bad sign.

 

CS

Travlin's picture
Travlin
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Understood
capesurvivor wrote:

When you look, you'll see that they registered to be able to sell, did not sell yet. I did not mean to misrepresent their actions but i consider them a bad sign.

Cape

When I read the article it was clear they had just prepared to be able to sell, but hadn't sold.  Yet.  Your  initial post did confuse that point, so thanks for making it clear to everyone reading this.  I agree this is ominous and appreciate your warning.  I'm taking it very seriously.

Travlin 

GregGH's picture
GregGH
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Posts: 2
Hi a new subscriber here.

Hi

a new subscriber here.  I own CEF.A  ( Central Fund ) - they also have a 100% gold fund ( GTU.UN for Cdn $ )  and a 100% silver fund ( SBT.UN in Cdn $ ) ... with the recent Sprott price to NAV so HI on the silver -- it pays to look for options.

They link these funds from their Central Fun web site.    These url's below show the $$ to NAV price - boy - do they change from day to day...

http://silverbulliontrust.com/net_asset_value.htm

http://www.gold-trust.com/asset_value.htm

BTW - is seems to be ( but have not yet tried it ) a low cost way to convert $$ from USA to Cdn and back again depending upon how  you buy and sell.  

Greg H

Kingsville, ON

 

 

New_Day's picture
New_Day
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Posts: 28
CEF pros and cons

h2oBoy - thanks for starting the thread on CEF. Below are two reports on the various risks in the popular GLD that inspired me seek out CEF.

Hinde Capital On Whether GLD Is A New CDO In Disguise

http://www.zerohedge.com/article/hinde-capital-whether-gld-new-cdo-disguise

Ben Davies - Radio interview discussing various risks in GLD                                                                                                    http://kingworldnews.com/kingworldnews/Broadcast/Entries/2010/8/12_Ben_D... (loads on Safari but not on Firefox)

ao - thanks for your post - it reiterates what my Canadian wife brings up: be wary of the Canadian gov't - especially if you are wearing a big t-shirt that declares that you are an American citizen. Reading your words made me think of the Olivia Newton John hit song with the words "physical."     

SteveW's picture
SteveW
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Posts: 490
US CAD exchange
GregGH wrote:

BTW - is seems to be ( but have not yet tried it ) a low cost way to convert $$ from USA to Cdn and back again depending upon how  you buy and sell.  

Greg, any security that is cross listed in Toronto and a US exchange can be used for low cost, compared with a bank, foreign exchange since you get the prevailing exchange rate with only trading fees. My broker requires that I transfer the security from my Canadian to US account, or vice versa, so the transaction takes a few days and incurs trading risk.

staninco's picture
staninco
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CEF in IRA - Tax Issues?

Hi - I'm seeking opinion  about whether there are any tax reporting issues related to holding CEF or GTU funds in an IRA.  I know there are for a taxable account, but hoping there is nothing extra to file or report when an IRA is the holding place.

staninco's picture
staninco
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Posts: 2
Why CEF in a taxable account?

Hi - just curious why you state that CEF isn't a bad choice "especially if it's in a taxable account".  I was under the impression that it was simpler to hold in an IRA, with no special reporting or filing requirements.  Is it because of the capital gains treatment if held and accounted for properly in the taxable account? 

agitating prop's picture
agitating prop
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Posts: 854
H20 Boy,  Are you keeping

H20 Boy, 

Are you keeping current about what's happening in Canada?  I would avoid just about ALL Canadian investments right now. As far as protecting yourself with Canadian currency, please give this careful consideration.  Asian money flows, largely responsible for sustaining an over heated real estate market that helped strengthen our currency,  are no longer supporting us. Sentiment has radically shifted. Big international flows are  funelling into the US---the stock market, real estate, high tech, and anything else you can name. Canadian oil is no longer a sensible play. Keystone pipeline may not happen. 

Avoid Canada and hedge your precious metals. Things could shift again, quite radically and when and if that time comes AND the price of metals become  part of a free market that accurately gauges inflation through movements in it's price, go for gold. Until then--question everything!

A better investment,, if you want to leverage off a more sure fire scarcity play--is water. If your name is any indication, you have to be aware of the unavoidable difficulties we face water wise. Fade the oil pipelines and look at who stands to benefit from laying water superstructure into the parched areas of the US. 

 

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