Go out and price physical gold. Most forms like coins or bars have about a $40.00 premium over the price of gold, and then there is usually a $25.00 shipping charge. If you do a bank transfer to buy the gold, then you have to wait 10 days after the money clears before they will ship. If you pay by credit card, they up the price another $30. I went to a pawn shop to buy gold coins and they wanted $150 per ounce premium over daily gold prices to sell me a one ounce gold eagle.
Physical gold is just more expensive and then you have to secure it, like keeping it in a safety deposit box. However, if you have gone through this instead of buying the GLD, then you will be much less likely to sell. Of course, you don't have to worry about if the gold really exists or if you actually own gold or paper.
I don't think the gold rush is over. Too many developing countries will want gold jewelry or gold to protect against bad currency. The price may go down further, but the further the price goes down, the faster it will come up when demand exceeds supply. Supply is already falling because of the depressed price. Gold mines will quit producing and the supply will start to dry up. The price of gold is too close to the production cost of gold. it is more priced like a commodity rather than a currency hedge at this time. Given that, gold should make a good inflation hedge, assuming the price keeps up with production cost.
New gold mines are hard to start. Any new mine will be a strip mine, which will have environmental opposition. The strip mine will have low grade ore, which will require expensive reclamation process. And furthermore, in a rising interest rate market, gold exploration funds will be non-existent.
Look at Taseko mines in Canada, they have been attempting to open a "Prosperity" mine for over 20 years and have faced environmental opposition by the Indians. Or, Thompson Creek, who sold half the gold for a loan to finish the mine.
Buy from china. I bought some from china back in june (the gold exchange there). For raw gold bar, 20 yuan administrative cost over spot price. The minimum requirement is 100g per transaction. Physical gold is a lot easier to get in that country. If you buy from jewelry store, the premium is higher.
A year ago stories began to circulate openly about tungsten “salted” gold bars. See “Chinese Discovered Fake Gold Bars of Tungsten in 2009”.
How this can happen is stated within, that depositories like the GLD fund state in their prospectus that the fineness of what is stored has not been certified. Do your own DD at the title cited above.
PMs accepted in exchanges like the COMEX have to come through a certified refiner and delivered by a certified delivery service, like Brinks. Therefore those investing in the GLD fund are taking substantial risks. The whole circuit from refiner to warehouses, like the COMEX, has to have been through an approved pathway. Therefore it seems that the Chinese did not do their DD when accepting gold that apparently came through unapproved sources.
In the above cited article it states: “And here’s what the Chinese allegedly uncovered:
Roughly 15 years ago – during the Clinton Administration [think Robert Rubin, Sir Alan Greenspan and Lawrence Summers] – between 1.3 and 1.5 million 400 oz tungsten blanks were allegedly manufactured by a very high-end, sophisticated refiner in the USA [more than 16 Thousand metric tonnes]. Subsequently, 640,000 of these tungsten blanks received their gold plating and WERE shipped to Ft. Knox and remain there to this day. I know folks who have copies of the original shipping docs with dates and exact weights of “tungsten” bars shipped to Ft. Knox. …”
No wonder Summers declined to become the new Fed Chairman.
One of the big pumpers of the GLD gold ETF has been Adam Hamilton. His timing predictions have also been way off the mark as to the direction of the gold market. You have to wonder about some of the online gurus as to whether they really are up to speed on what is going on behind the scenes. Or do they know? Hmmm? Why would anyone recommend GLD knowing that it has been set up to get around the audit trail? Hamilton, by way, likes to also pump his CPI credentials.