• Investing
  • Stock
Round Table Thoughts
  • Economy
  • Editor’s Pick
Home Stock CEF Share Price Discount is a Sentiment Tool For Gold
Stock

CEF Share Price Discount is a Sentiment Tool For Gold

by August 17, 2023
by August 17, 2023 0 comment
Share
0
FacebookTwitterPinterestWhatsapp

ETF investors who are interested in gold have long been able to turn to products like GLD and IAU as ways to invest in gold. Those ETFs buy and sell gold as needed to back the shares of the ETFs, and the amount of their holdings vary with investor demand, which keeps the share price of those ETFs pretty close to their net asset value (NAV).

A much older product, which is still around, is the Sprott Physical Gold and Silver Trust (CEF), which holds the CEF symbol because it was formerly known as the Central Fund of Canada. A different company, Sprott Asset Management, took over the Central Fund of Canada in January 2018.

According to Sprott’s web site, “Sprott Physical Bullion Trust unitholders have the right to redeem for physical metals on a monthly basis, subject to meeting the minimum redemption amount.” So unlike an ETF, whose numbers of shares can expand and contract as needed to meet shifting investor demand, CEF’s assets stay relatively fixed over time, and its shares can trade at a premium or a discount to the NAV. Most of the time, the share price is at a discount to NAV.

Sometimes the amount of that discount gets to an extreme level, as investors form such a pessimistic view of the prospects for precious metal prices that they want to get out urgently, and will even accept a price that is at a steep discount to NAV just to be able to exit. We are seeing one of those conditions right now, with CEF shares priced 5% below NAV.

Such instances are reliably associated with important bottoms for gold prices. However, I need to stress that “associated with” does not necessarily mean that the final price bottom is upon us. An oversold “condition” is not the same thing as a “signal”.

The CEF trust holds both gold and silver. Sprott also operates a separate trust under the symbol PHYS, which holds only gold.

Like CEF, the share price of PHYS also trades are a premium or discount to NAV. Right now, the amount of discount in the shares of PHYS is not as large as that of CEF, which is curious. But it is still a pretty sizable discount to NAV, which eventually ought to matter for gold prices.

You Might Also Like
  • Precious Metals and Miners Ready to Rally
  • Mild Recession? Three Indicators That Can Offer Insights
  • What’s Wrong With This SPX Breakout?
  • Market Research and Analysis – Part 5: Drawdown Analysis
Share
0
FacebookTwitterPinterestWhatsapp

previous post
Does “NoGo” for the S&P = NEW Opportunities for Active Investors?
next post
House Judiciary subpoenas DOJ, FBI for documents related to alleged collusion with Big Tech companies

You may also like

These Riskier Areas Start the New Year RALLY!

January 4, 2025

Fearless Rotation Back To Growth Stocks Is Unfolding Now

March 17, 2023

USD strength Accelerates after completing bearish flag in EUR/USD

January 17, 2024

The Ord Oracle September 11, 2023

September 12, 2023

The Best Five Sectors, #18

May 5, 2025

Master the MACD Zero Line for a Trading Edge!

December 11, 2024

Smashed Names Showing Life

January 20, 2023

Top Two Sectors to Watch in April 2024

April 3, 2024

Inflation, What Inflation?

January 28, 2023

Pullback Imminent for Nasdaq 100

December 2, 2023

    Stay updated with the latest news, exclusive offers, and special promotions. Sign up now and be the first to know! As a member, you'll receive curated content, insider tips, and invitations to exclusive events. Don't miss out on being part of something special.


    By opting in you agree to receive emails from us and our affiliates. Your information is secure and your privacy is protected.

    Recent Posts

    • Nvidia results spark global chip rally

      May 30, 2025
    • Boeing to resume airplane deliveries to China next month, ramp up Max production, CEO says

      May 29, 2025
    • Nuclear Power Trio: OKLO, SMR, and CCJ in Focus

      May 29, 2025
    • Analyzing SIL, USO, and NVDA: Could These Bullish Patterns Trigger?

      May 29, 2025
    • E.l.f. Beauty to acquire Hailey Bieber skin care brand Rhode in up to $1 billion deal

      May 29, 2025

    Popular Posts

    • 1

      Trump-era China sanctions ended by Biden may be...

      June 27, 2024 2,764 views
    • 2

      Walz’s honeymoon with China gets fresh scrutiny as...

      August 9, 2024 2,470 views
    • 3

      Biden appointee played key role in recruiting Chinese...

      June 25, 2024 2,450 views
    • 4

      Shein’s global ambitions leaves some cybersecurity experts fearful...

      July 10, 2024 2,429 views
    • 5

      Harris VP pick spent years promoting research facility...

      August 29, 2024 2,307 views

    Categories

    • Economy (7,009)
    • Editor's Pick (2,104)
    • Investing (538)
    • Stock (2,578)

    Popular Posts

    • 1

      Trump-era China sanctions ended by Biden may be revived under new House GOP bill

      June 27, 2024
    • 2

      Walz’s honeymoon with China gets fresh scrutiny as Harris camp blasts ‘lying’ critics

      August 9, 2024
    • 3

      Biden appointee played key role in recruiting Chinese businesses to Delaware: ‘Longtime friends’

      June 25, 2024
    • 4

      Shein’s global ambitions leaves some cybersecurity experts fearful of Chinese spy threats

      July 10, 2024
    • 5

      Harris VP pick spent years promoting research facility that collaborated with ‘Chinese military company’

      August 29, 2024

    Latest News

    • Nvidia results spark global chip rally

      May 30, 2025
    • Boeing to resume airplane deliveries to China next month, ramp...

      May 29, 2025
    • Nuclear Power Trio: OKLO, SMR, and CCJ in Focus

      May 29, 2025

    Categories

    • Economy (7,009)
    • Editor's Pick (2,104)
    • Investing (538)
    • Stock (2,578)

    Disclaimer: RoundTableThoughts.com, its managers, its employees, and assigns (collectively “The Company”) do not make any guarantee or warranty about what is advertised above. Information provided by this website is for research purposes only and should not be considered as personalized financial advice. The Company is not affiliated with, nor does it receive compensation from, any specific security. The Company is not registered or licensed by any governing body in any jurisdiction to give investing advice or provide investment recommendation. Any investments recommended here should be taken into consideration only after consulting with your investment advisor and after reviewing the prospectus or financial statements of the company.

    Copyright © 2024 RoundTableThoughts.com. All Rights Reserved.

    Round Table Thoughts
    • Investing
    • Stock
    Round Table Thoughts
    • Economy
    • Editor’s Pick

    Read alsox

    Stock Market Pushes Higher, But Is...

    June 13, 2024

    Why Stocks are STILL the BEST...

    July 16, 2024

    The Most Successful Base Pattern is...

    December 9, 2023
    Sign In

    Keep me signed in until I sign out

    Forgot your password?

    Password Recovery

    A new password will be emailed to you.

    Have received a new password? Login here