If you are a gold/silver kook, you should read this
For you goldbugs out there, today may be a very good opportunity to buy CEF. They just announced their intention to buy more gold and silver for their fund. This happens only a few times a year at most.
When it does happen the price of CEF drops dramatically in comparison to gold and silver (as you can see from today’s price moves.) The NAV per share is still the same after the purchase but the premium (CEF is a closed end fund) drops due to the offering.
Anyways, it’s an extremely good bet that the premium will rebound after a short period of time. This gives you the opportunity to be long gold and silver while getting a little extra kick from an increasing premium.
DISCLOSURE: I am currently long CEF and short SLV and GLD until the premium rebounds.
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