I am a Uk investor with a small amount of bullion in Bullionvault and also in an ETF in an ISA. I also have a small silver ETF also in the ISA.
Much is made of the counterparty risk involving holding ETFs by the vault holders and people who stack at home. Obviously there is a big advantage in buying an ETF from the ease and (normal) liquidity point of view. Most people, I would say have gold to hedge their other investments or for the doomsday merchants in case the world systems break down.
In the case of the hedge idea, we are probably just talking about a crash or dip of other investments, so no real breaking down of the financial system, just the normal up’s and down’s of the stock exchange. My guess would be that you could sell your gold ETF with the usual ease.
In a case where there was severe counterparty risk to your gold ETF, we might be talking about something more serious, WWIII, the breaking down of markets or say EU/UK sanctions on the USA for actions against Greenland, where having a chunk of gold in a vault in Switzerland might be safer, assuming you can still get access to it.
I guess what I’m getting at, is how serious is the counterparty risk for a major company gold ETF? Are the risks of holding such an ETF overblown by the vault type companies. If the ETF gold market went to hell, would we have bigger problems than our investments and if this is the case, does it just make more sense to hold the ETF for the ease it offers and mentally discount any counterparty risk? Thanks