Alt Investments
Gold Investors Switch Out Of ETFs To Physical Market, Claims Platform

The arguments about the pros and cons of holding physical gold directly rather than via a proxy instrument or entity such as a fund is given another twist by the investment platform.
An investment platform focused on alternative assets has claimed
that a large chunk of its new clients are switching out of
gold-linked exchange traded funds to directly hold the yellow
metal because they are worried about high central bank money
printing.
In comments that will fuel debate about how to play the gold
market – currently strong amid macro-economic concerns – iTrustCapital said that
43 per cent of new customers are using its gold investment
platform plan to transfer assets out of gold ETFs.
"Since we launched gold on our platform, most of the clients I
speak to are moving funds from gold ETFs to fund their accounts.
A common theme is a complete loss of trust in government and Wall
Street," Blake Skadron, chief operating officer of iTrustCapital,
said.
The firm said that clients want to hold physical gold directly
rather than indirectly via an ETF or some other instrument.
Clients place trades that are executed through precious metals
house Kitco and stored at the Royal Canadian Mint. The assets are
100 per cent backed with physical metals, it said.
After pushing over $2,000 per ounce in early August, the price
has eased back below that level in recent days. Wealth managers
and gold industry figures have predicted that the metal could
advance further. (See an example here, and an
article about family offices and gold here.)
Looking at the US market alone, iTrustCapital said the US Federal
Reserve has pumped nearly $9 trillion into the financial system
since the COVID-19 pandemic struck in March. The total US debt
could exceed 180 per cent of GDP by 2040, according to
projections from the nonpartisan Committee for a Responsible
Federal Budget, iTrustCapital said.
"Debt levels are getting to the point where governments will
increasingly be incentivized to devalue their currencies to
service that debt," Tim Shaler, chief economist iTrustCapital,
said.
The firm was launched last year and aimed at clients managing
their retirement accounts.
FWR continues to track developments in the space, such
as new investment plays around gold. It
interviewed the Arizona-based business Monetary Metals more
than three years ago about how to obtain yields in gold - an
approach challenging conventional views about the metal.