Investing

why MNT.TO Deviated from the GOLD price?

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  • Jul 29th, 2020 8:12 am
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Jan 19, 2018
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why MNT.TO Deviated from the GOLD price?

In the past few days, the gold price is increasing, same as GLD in the US and CGL.TO in Canada. But MNT.TO drops 2%, why?
Thank you.
7 replies
Deal Addict
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Dec 24, 2007
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There is something called Premium to Net Asset Value of the Unit. A "unit" is like a share (in this case a share of gold bullion)

The Premium occurs when demand outstrips supply and the Mint doesn't ramp up the purchase of gold bullion fast enough to accommodate the increase cash flow. Buyers end up overbidding so the price of the unit runs up over the actual value of the asset. Eventually as demand slacken the premium narrows. So what you are seeing now is the Premium that is narrowing and return goes negative.

GLD and CGL are ETFs that have pledged to buy as much gold as per the money flowing in, so they track pretty closely to the gold prices.

Explanation in this article: How not to buy gold.

Short summary: Don't buy MNT if you want to hold gold due to the Premium effect, buy other ETFs.
Deal Addict
Jun 15, 2012
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Saskatoon
That is why if you want to invest in gold, buy physical. Paper gold is a scam.
PHYS is probably the closest thing among paper gold to the physical metal.
No need to type thank you; upvote=thanks.
Buffett, investors are focusing “not on what an asset will produce but rather on what the next fellow will pay for it.”

“Because gold is honest money it is disliked by dishonest men.” – R. Paul
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Dec 24, 2007
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ukrainiandude wrote: That is why if you want to invest in gold, buy physical. Paper gold is a scam.
PHYS is probably the closest thing among paper gold to the physical metal.
Nonsense...MNT is a share of physical gold in pretty much the same way as PHYS. The only difference is how the two handled the influx of oversupply of cash from buyers. PHYS used the money to buy up more gold to match demand, whereas MNT didn't. Just basic economics: Demand exceeding supply will push the price up. There's no scam going on.
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Jun 15, 2012
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Saskatoon
WetCoastGuy wrote: Nonsense...MNT is a share of physical gold in pretty much the same way as PHYS. The only difference is how the two handled the influx of oversupply of cash from buyers. PHYS used the money to buy up more gold to match demand, whereas MNT didn't. Just basic economics: Demand exceeding supply will push the price up. There's no scam going on.
That is little of help to MNT holders, isn’t it.
No need to type thank you; upvote=thanks.
Buffett, investors are focusing “not on what an asset will produce but rather on what the next fellow will pay for it.”

“Because gold is honest money it is disliked by dishonest men.” – R. Paul
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Dec 24, 2007
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ukrainiandude wrote: That is little of help to MNT holders, isn’t it.
Only if you only look at the negative side of things..for every buyer there is a seller. Who's side are you on??

If you were a MNT holder before the big increase in the Premium, they made a ton more money than if they just held gold.
If you are a MNT holder after the big increase in Premium and now that the price is getting back to the true price of gold, yeah...they are the one crying.

Get educated before jumping into a market.
Deal Addict
Jun 15, 2012
2837 posts
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Saskatoon
WetCoastGuy wrote: Only if you only look at the negative side of things..for every buyer there is a seller. Who's side are you on??

If you were a MNT holder before the big increase in the Premium, they made a ton more money than if they just held gold.
If you are a MNT holder after the big increase in Premium and now that the price is getting back to the true price of gold, yeah...they are the one crying.

Get educated before jumping into a market.
Gold is gold no education needed, buy and hold, pass it to the next generations.
Paper gold supposed to track price of real gold. Not feed nonsense to investors.
If I want to get educated in watch my investing every hour I would go into the share trading.
Gold is safely that is the whole point.
No need to type thank you; upvote=thanks.
Buffett, investors are focusing “not on what an asset will produce but rather on what the next fellow will pay for it.”

“Because gold is honest money it is disliked by dishonest men.” – R. Paul
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May 11, 2014
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ukrainiandude wrote: Gold is gold no education needed, buy and hold, pass it to the next generations.
Paper gold supposed to track price of real gold. Not feed nonsense to investors.
If I want to get educated in watch my investing every hour I would go into the share trading.
Gold is safely that is the whole point.
ridiculous. @westcoastguy is correct. The "problem" wIth MNT is the exact same as physical gold. When you buy gold at the bank or dealer, you pay a surcharge over spot correct? You might also pay delivery fees? Guess what? That is a premium. Worse off, you almost never can buy physical gold at spot or less. In fact buying physical is usually more expensIve because when it comes time to sell, there is a discount to spot. Sell on your own? Have to find a buyer or costs time and money to ship.
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