There is a good article in Economic Times explaining the pros and cons of various methods of investing in Gold – http://economictimes.indiatimes.com/slideshows/how-to-buy-gold-this-akshaya-tritiya/slideshow/20009397.cms
For Gold ETF they mention that “The biggest problem faced by ETF investors, however, is the lack of liquidity in some ETF counters. So you should always consider a gold ETF that has sufficient cash reserves.”
Two questions came to my mind –
1. How can a retail investor check the cash reserves of a MF company ?
2. The NAV of Goldman Sachs Gold Exchange Scheme (the most active ETF) as of today is Rs. 2561.93 whereas the rate on MCX for 10gm is Rs. 26854 (i.e. Rs. 2685.40 per gram). Why is there a gap between the rates ?
Thanks
Ashutosh