This post was just published on ZYX Buy Change Alert
Today there is an opportunity to buy physical gold in a convenient manner for those who feel a compulsion to buy gold. The opportunity arises from secondary of PHYS or Sprott Physical Gold Trust. Secondary this morning was priced by RBC Capital at $14.90 for 16 million shares. The ETF traded as low as $14.64 in the pre-market. Readers may readily notice that gold is up strongly today but PHYS is down.
Typically PHYS trades at a premium of its gold holdings. The reason for the premium is that PHYS holds physical gold bullion that is fully allocated and segregated in a secure LBMA approved third-party storage facility in Canada. When ever there is a secondary, PHYS comes down to a price equal to its net asset value.
If gold continues to go up, PHYS will trade at a premium. Such premium can add 7% to 15% to the returns. On the other hand if gold goes down, the loss will be less because PHYS is likely to soon develop a premium.
U.S. non corporate investors also get a tax advantage because PHYS sale is taxed at 15% vs 28% for most gold ETFs and physical gold.
We are not recommending buying gold at this time. We are simply providing this information in response to a large number of emails expressing interest in buying physical gold in a convenient manner and now the secondary is providing an opportunity.