Rock, Paper, Metal

I keep looking for something I can't get
Broken hearts lie all around me
And I don't see an easy way to get out of this
--Cutting Crew

Over the past month or so, I've been unwinding my 'paper' positions in the precious metals, namely my positions in GLD and SLV. A few reasons for this. One is that I'm stepping up to a nicer, more expensive house and as I sink more of my net worth into real estate, it felt prudent to take off some risk in a another 'hard asset' category.

There are some questions about counterparty risk with owning these precious metals ETFs. Although they purportedly buy physical gold, exactly where the physical stands related to 'long only' warehouse stock versus leased to others is confusing and...unaudited by the charter of these securities.

If metals prices really go crazy, there is some chance that the government would slap some controls on the bullion ETFs since they move such big volumes of metal. I don't want to be there for that.

Instead, I'll be more comfortable adding to my physical bullion stock over time. Should gold get hammered towards $600 or lower (as some predict), I'll look to step up my bullion purchases.

My metals ETF exposure has gone from 25-30% of liquid assets down to 4-5%. I'll likely be totally gone from GLD and SLV on any further liftage. Hopefully we'll get another pop here, although the technical set-up looks head-and-shouldersy just as GLD hits uptrend support.

Am getting that 'book 'em if you got 'em' feeling...

positions in GLD and SLV