14 April 2015

Gold Daily and Silver Weekly Charts - Choices About the Central Gold Trust?

'The Banks must be restrained, and the financial system reformed, with balance restored to the economy, before there can be any sustainable recovery.'
There will be a time when this message is taken to heart-- most likely because there is no other viable choice left to the plutocrats.

I had this from a reader:
"Would appreciate your opinion on the following matter. In my mail today I received a request from Polar Securities asking basically that I vote for their nominees in the upcoming election for the positions of trustees on the board of Central Gold Trust. Their contention is that the trust has consistently traded below NAV which they feel is a disservice to its unit holders. Their aim is to make amendments so that the trust functions more like the Sprott fund including the ability to be redeemed in either cash or actual gold. I was wondering if you had heard of this and also if you have any opinion of Polar Securities about whom I know exactly nothing."

 I don't think I would vote in favor of such a change personally if I were a unit holder of the Central Gold Trust without some serious information  and safeguard that would prevent the fund from being stripped of its gold on the cheap by funds and bullion banks.

It sounds like a move to make the fund an instrument of short term arbitrage which would significantly change its character as a long term investment holding.

A discount to NAV is not a problem if is it constant.   Sure you may sell the units at a discount to NAV but if you also buy them at a similar discount what is the difference?   If done recklessly a change to the charter might provide a 'one-time' kick to the price, but then open the door to something deleterious to the trust.

It depends on why one hold the fund and what the specifics might be.  So obviously I cannot render an opinion based on what I know, and I doubt that any unit holder could do so either.

But I did think it was interesting that this is apparently happening and wanted to pass it along.

P.S. I found this with a web search. The objections of the shareholder were pretty much the thoughts that crossed my mind, but again, not strongly without knowing all the details.

It sounds like a move by speculators that would significantly change the nature of the fund.

Long Term Central Gold Trust Investor Joins Mounting Opposition

I also found this pro-change statement from the other parties.

Unlocking Unit Holder Value

'Unlocking Unit Holder Value' sounds like a flip and strip.  It might not be but I would vote no based on what I have read if I were a person who viewed the Gold Trust as a long term investment.

Have a pleasant evening.