Q: With Central Banks buying a lot of gold I am surprised a company like this has declined so much over the past. Is it because of its abandoning of a growth model? Will it take an increased interest in buying / storing by individual investors to elevate the stock price? I am assuming most of their profits are from recurring fees (?)
Finally, in the past I was a customer of GoldMoney Inc. With "mounting concerns" coming from south of the border, I am considering reopening an account with a much larger gold purchase and storage outside our country than before. What is your trust level in this company, and do you have any concerns about doing this with a large planned bullion position?
Finally, in the past I was a customer of GoldMoney Inc. With "mounting concerns" coming from south of the border, I am considering reopening an account with a much larger gold purchase and storage outside our country than before. What is your trust level in this company, and do you have any concerns about doing this with a large planned bullion position?
5i Research Answer:
XAU's very volatile earnings history, and small size, and leverage, are also contributing factors to its underperformance. It is up 14% this year, but certainly does not move like the rest of the gold sector. Recurring fees are a big factor, and we think it will taking a bit of a crisis to be a catalyst for more customers/storage. Our comfort level is 'reasonable'. Its size is a factor, and at the end of the day there is some third-party risk here. Owning gold through an ETF at least completely segregates assets completely from the manager. We might suggest SGOL, which holds its gold in Switzerland.