One day opportunity for a potential quick gain with gold

There is a good opportunity emerging but it will be gone after tomorrow.
For anyone who are interested to buy some gold at this price, you may do so tomorrow and your position may potentially quickly gain by 6% due to a corporate action.

I'm talking about Central GoldTrust (GTU), which is a Canadian-based closed-end gold trust fund, one of the largest in the world. This is a fund you can trust as it is truly backed up by physical gold. But as a closed-end fund, it can be traded at discount or premium depending on the market mood. So far GTU is at a 5.6% discount to its net asset value (NAV). If you like gold at the current price, this is a good deal since when people start to love gold again some time later, the discount will disappear and likely it will be traded at premium.

Now even a better deal is emerging. The Canadian billionaire, Eric Sprott, is famous for his successful investment in precious metals and according to him, his personal assets are at least 80% tied to precious metals. That shows how strongly he is confident in gold and silver. Sprott has set up an ETF, Sprott Physical Gold Trust (PHYS), which is not only backed up by physical gold but it can also deliver physical gold to investors for their fund units, if they decide to do so. In other words, it is almost like you buy physical gold and save it with PHYS. Because of that, PHYS is always traded at its NAV, equivalent to the spot gold price. Because of that, Sprott think GTU is not a good option for gold investment and is seeking GTU shareholders to vote whether they would like to merge with PHYS or stay as it is. This vote will come at 5 pm tomorrow Eastern. If PHYS is voted for, then the discount on GTU shares will immediately disappear. In other words, GTU share price will suddenly increase by about 6%.

Of course no one knows for sure what will be the vote result but I think the chance is high. Even the worst case when GTU stays as it is, you can still buy it at a discount. I cannot say gold is certainly at the exact bottom but I think it is damn close, if not yet there. Starting to accumulate some gold shares is not a bad idea at all in any case. After all, it is a financial insurance everyone should have.