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Is GLD Overdue To Buy Two Hundred Tons Of Actual Gold?
One of the completely unmentioned side effects of the recent surge in gold prices, has been the fact that one of the biggest holders of gold, the GLD ETF (presumably physical, even though it is kept in the cellars of HSBC in London, one of the two banks recently charged with a RICO suit for precious metal price manipulation) which as of close today held 1,294 tonnes, has not really bought any gold in over 5 months. The issue is that GLD's gold actual holdings, which feed right into its NAV, have been flat since June, peaking at 1,320.44 tonnes on June 29, and flat-lining and even declining through today. Since then, however, gold spot has risen by 14%. As the chart below shows, GLD tends to reindex its NAV in spurts, buying up gold during specific periods when gold goes up, notably in March of 2009, and between May and June of 2010. As of today, the trust's NAV per GLD in gold is at an all time low of 97.67. The bottom line is that GLD is now long overdue to replenish its actual gold holdings, net of redemptions. Assuming that GLD will increase its holdings in line with prior accumulations, when gold price surged, the ETF may soon be due to buy about 200 tonnes of gold. Should that happen, GLD will further increase its distance to 6th sovereign holder of gold, China, which as of September 2010 held "just" 1,040 tonnes. As to what would happen to the price gold if it is made known that there is a buyer for 200 tonnes of gold, we leave to our readers' imagination.
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More like over due for a crime scene investigation.
rolling...this is like making JPM load the gun, bring it up to its head and fire....
i mean, how great is this???!!!!
I always wondered how the issuers of GLD made money. How simple: they just sold more shares than they bought in real gold. They probably had one of those big red "That was easy!" buttons they pressed as they raked it in.
Hahahahaha... now THAT's humour.
GLD will buy one ounce off HSBC, lease it to HSBC, buy it again, etc, 6.5 million times if required.
It appears to me that GLD has plenty of "paper gold". So, 1,000T more or less of "paper-gold" do not make much of a difference.
IMHO, GLD is bogus like Enron was once.
exactly, GLD never takes physical delivery, thus they are just part of the "fractional reserve" paper gold scam. If anyone were to actually buy 200 tons of physical in the market the price would go parabolic. Since GLD is just a handful of zeroes and ones in a computer nothing will happen at all (as was intended).
"If anyone were to actually buy 200 tons of physical in the market the price would go parabolic."
What's amazing about this entire scenario, and a lot sad, is the J6P crew, is not EVEN into these markets.
For a Parabolic move, it usually takes a LOT of regular people to lose their minds, and buy at any price, and then she crashes.
Except this time, it's different......Really.
The rest of the world that never participated has now the fiscal ability to more than take J6P's place.
I'm starting to hear them... they all wish they could buy gold with their 401k.. i tell them can.. just take out a loan against yourself.. they think that isn't good since they have to pay that money back.. i just give up. can't help them.
they all want the "I win" button
It has always been my belief--since GLD's inception--that GLD was designed to absorb demand. At some point, however, the physical market will overwhelm GLD in some fashion. People with GLD will sell and rush to physical and then the real stuff will go nuts. I believe GLD is indeed like Enron, and the finish will be similar as well.
You are absolutely correct in that belief. That is exactly why GLD and SLV were created. Yet the entities are mostly full of paper and not physcial. The real game will start when the idiots that own this junk scramble to switch into either physical or well run precious metal funds such as Central Fund and Sprott.
This will likely happen in silver first . Above ground physical Silver in particular is basically gone and tightly held . All that is left is producers production supply that is feeding into the refineries. However there is now a 6-12 month wait from refiners, minimum . Only long time prime buyers who have relationships with the producers and the refiners get first kick at that silver. When you see premiums on Sprotts PSLV and Central Fund's " Silver Bullion Trust " growing to over 10% you can be sure the big buyers of those funds already know that the shortage situation is getting worse.
Anytime you can grab these funds at a few percentage points of premium, jump at the chance. It will become a rarer and rarer event. Best time to grab it is when one of these funds does an overnight issue.
Is that 'Fractional Reserve' or Fictional Reserve??
sounds like standard industry practice
Fisher of the Dallas Fed sez it as it is today...
"The Federal Reserve will buy $110 billion a month in Treasuries, an amount that, annualized, represents the projected deficit of the federal government for next year. For the next eight months, the nation’s central bank will be monetizing the federal debt." and it's up to "The Fed is going out of its way to be a good citizen. It is time for the Congress to do the same."
WE ARE SO FUCKED...GLD to the moon - Fisher has just knowingly accused Bernanke of PERJURY!!! These are like cracks in the dam and water is seeping through!
Actual must read below
http://dallasfed.org/news/speeches/fisher/2010/fs101108.cfm
uh oh.....shades of 1930.......same deal....Fed guvs going off the reservation into a panic duck and cover. The upcoming new Congressional regime must be causing some sweat beads. I guess they're just throwing a fuckyou at the outgoing regime so as to play act some form of sanity for the new regime. Must be a tough job.
Good thing the Fed is not a GSE...snark.
Forget gold, uranium is better, much better. And Cameco is no camel.
http://abetterwaytotradestocks.blogspot.com/2010/11/cameco-is-no-camel.html
That is ONE BIG ELEPHANT standing in the vaults of HSBC.
i havent seen Leo in a while....
Right, 200 tons of "gold" will be purchased.
In reality, they will just get a little receipt that links back to a short contract rather than actual gold.
GLD and SLV are clever price suppression schemes if that is their intent. It really does make you wonder how much demand has been drowned out of the pricing of the two metals. Those holding physical gold/silver will be very happy if the ETF collapse occurs, because after all ETFs are just fancy derivatives.
I can't fathom how high prices would go if GLD and SLV collapsed.
Dead on, ETF's esp PM's are nothing but price suppresion programs, and a tool for traders.
But the #1 goal, is CONTROL over the price of physical.
No doubt if the ETF's were not available Gold would have already hit it's inflation adjusted high, and Silver would be at a 40-1 ratio.
I just wish Congress would FORCE them to actually show the physical.
Perhaps Congress should start in its own back yard: Ft. Knox
GLD is not getting a lot of new investors.
New gold investors are not interested in "unallocated" gold funds like this.
New gold investors want allocated gold storage. They want to know the bar serial numbers on their gold, where their gold bars were minted, and the exact weight of their bars.
GLD is for momo traders--it is not for real gold investors.
The holes in its prospectus are so large you can drive a semi-truck through them, according to former HUD head Catherine Austin Fitts.
That is why GLD's "holdings" are flat, in spite of strong gold price gains.
Yes, this is also one of the reasons the miners are finally starting to realize some price appreciation.
I have it on pretty good authority that retail interest in gold is at best 'moderate' at present.
I only follow the RBA's data but assuming most central banks act in similar fashion, gold leasing is at lows not seen possibly ever, concurrent with very low gold interest rates. Central banks are unwinding their positions. Being big players in the gold market this could well be the reason for the strongly rising price.
Are they aware of something they're not letting on? Like the parlous state of the global monetary system?
truont,
I have yet to find ONE FTF, or suedo ETF, Sprott included, that did not hammer your butt,cost wise IF you wanted possession, and the minimum I have found is 400oz bars.
Perth may be the exception...........
Personally, they are the only one I would even come close to trusting, with allocated, as they do allow coins, smaller bars.
Yes, you have to pay a premium for allocated gold, but that is what investors are now demanding. The relative discount you get for unallocated gold like in GLD and gold pools, is now less than the perceived counterparty risk factor of these funds.
Why do investors feel this way? That is the million ounce question...
I assume PHYS will have to follow as well?
No. PHYS sold units and bought gold with the proceeds. If PHYS was to buy more gold they would have to issue more units.
GLD is a sham. They don't have the gold. It is paper gold. Any gold that bank may have in its vault probably belongs to someone else. Sad but true. Get physical........
"Is GLD overdue to buy two hundred tons of actual gold?"
...why, yes, mr. durden...but i recommend they buy 200 tons of bullet-proof vests first, for i noticed some investors "loading up" on some reality...and they weren't very happy as they were sipping their coffee and drooling at the same time...not a pretty sight.
If it were anyone other than a primary market maker who was short, silver would be at $50 right now, because, the primary market makers would all be buying into the squeeze.
Unfortunately, when the shoe is on the other foot it’s different. You can never underestimate the power of the big banks when they have the full force of the Fed and U.S. Government behind them.
I would love to see JPM get their tit in a ringer over this, but, don’t count on it. I can just imagine an emergency ruling by the futures market to start accepting silver and gold certificates in lieu of real physical, then brother Benny will start printing the certificates by re-stamping old worthless greenbacks.
I am aware of some GLD owners selling and using their gain to FINALLY buy physical. So, could make for a few dislocations, although I still think the "newly aware" do the easy thing in an ETF without understanding all the implications. It's what brokers recommend.
Roger that - the banks will not relent, they will obfuscate and lie when bought to court, delay and pay off anyone that gets in their way. The paper Gold from the IMF will be made available to the banks and soon I believe the IMF will "discover" a large silver reserve they have been holding for a customer and make that available for lending as well.
All is well per Lara Crigger via John Nadler as of November 4, 2010:
"Conspiracy theorists claim that the major gold ETFs don’t regularly conduct audits, so investors can’t necessarily trust that the gold the funds claim to hold actually exists. This is 100% false. Factually incorrect. Wrong-o. ALL of the major gold bullion ETFs available to US investors conduct independent audits, including GLD.
One audit is a full bar count, while the other is a random sampling. In some ways, ETF gold is actually more trustworthy than the stuff you’d find at coin shops or dealers, because banks offer a paper trail tracking the entire life cycle of each gold bar, from casting to custody. Outside of a bank, it’s harder to dig up the same certified paper trail."
http://www.kitco.com/ind/nadler/nov042010.html
In short, we have been wrong-o all along.
Says the guy who has been perpetually wrong his whole career.
Even if the gold is there, it is double sold at LEAST.
no way? You mean a digital IOU from my broker for some ETF that has a paper claim to gold in someone else's vault is actually MORE trustworthy than, say, holding the shit in my own fucking hand? Who knew?
Now you know...and knowing is half the battle:
http://www.youtube.com/watch?v=_69RpLMehZs&feature=related
Oh!! Well, Why didn't you say so before??? Now that I don't have to worry about my gold actually being in some vault, in a foreign country, I'll just go out and get an eight-ball, some hookers and party on!
Man you really had me going on that article until the words "bank" and "audit" and "paper trail" were all in the same paragraph....
Darn
All is well here. Nothing to see.
Anything Neg Nadler has to say, I would not beleive.
He has called this wrong 90% from day one.It got so bad, I will not waste my time reading his Blather Blog.
I like to sit back and imagine how much money Nadler has lost for his clients with his attitude and consistently, persistently wrong calls. How many times he has got them short only for them to get the hose, again and again. It makes me feel good.
Where is the reset button? I've taken pyhsical posession of gold and silver already and here is to hoping HSBC and JPM will be stuck holding my bag
+1
Now press and hold...
there isn't 200 tons for them to buy from anyone willing to sell in that quantity.
They will likely purchase a derivative, essentially filling the major paper gold vehicle with more...paper gold
That number only goes down, and has nothing to do with future or past purchases of gold.
GLD sells a little gold every day to cover operating expenses, and that amount is deducted from the NAV.
You can go through the historical data and you'll see that NAV started at 100% and has gone down a little every day. You can match that against "Gold sold per share" which is also reported daily.
I'm sure GLD is hedged through futures contracts at the COMEX. They will take delivery of the phsyical at expiration. Whether they get any gold is the question. Perhaps they will roll those contracts over, and add an entry that good delivery will be made "shortly".
Capital controls!
One can only wonder what will go on behind the closed doors of the upcoming G-20 meeting. One thing is for sure, the rest of the world is really pissed at the United States for the fiscal and monetary train wrecks they have caused. From a fiscal standpoint the U.S. has "out-Greeced, out-Irelanded and out-Spained" the rest of the world.
From a monetary standpoint the U.S. has become a complete joke and seems to be following Zimbabwean policy. It is clear that current policy can only end in complete ruin. The double whammy of foreigners no longer accepting Dollars and refusing to participate in Treasury debt auctions is where this will end up.
China will have lots to say at this meeting as they have become very uncharacteristically and publicly boisterous regarding both U.S. fiscal and monetary policy. The press is so bad that a duel to the death will occur yet it will be reported as a "love in"... anything but. In reality the USSA has only one policy tool left, only a war at this point could reverse capital flows as historically it moves toward the more mighty. Barring a war (even this might not do the trick) the Dollar has precious little time left as the world's reserve currency.
Foreigners surely know that the game of Dollar musical chairs is on and it is only a matter of time before some sovereign somewhere "chickens out".
Many point to Gold as being in a bubble which is ridiculous because less than 1% of Americans have ever held a Gold coin of any kind in their hands. They do know PAPER however. It is paper that is in the greatest bubble ever imagined. Dollars, Treasuries, CMO's, CD's, name it, it is all paper with no value yet bid up to the moon. Someone wrote a very apropos piece a couple of years ago titled "Turtles all the way down" where they described the financial system as a stack of turtles piled one upon the other. The problem being that the turtle at the bottom was hanging in thin air with no base whatsoever.
THIS is the entire financial system because everything is based or backstopped by Dollars which have no backing whatsoever and as you know now can, must and most certainly will be printed to oblivion.
While today the markets are worried about Ireland and Portugal, they are not the problem, The U.S. is. For how long foreigners will continue to accept worthless chits of paper in exchange for real goods is any body's guess. The USSA's trade deficit, and thus standard of living, will collapse like a house of cards once foreigners refuse Dollars and boycott debt auctions. The old saying that the only things certain are "death and taxes", ... add to this "all fiat currencies collapse" as another certainty.
Smell capital controls!
A Canadian airline pilot reported this weekend US CUSTOMS AGENTS asking people leaving the USSA whether they had more than $10,000 on them! THIS smacks of a "fence" being erected to prevent capital flight. The next step is to electronically outlaw capital flows.
This is exactly what is coming soon. Sure! you can leave anytime you want but good luck living without money because it's staying here. "Have a nice day!".
Now all that is needed is a couple more denials of a devaluation and it's a lock. Devalued currency that cannot exit and won't be honored even if it does. Scary stuff indeed!
Got Gold?
Viva LeMetropoleCafe!
[quoting]
A Canadian airline pilot reported this weekend US CUSTOMS AGENTS asking people leaving the USSA whether they had more than $10,000 on them!
I frequently (a few times a month) cross the border by car from the United States to Mexico. About two months ago at San Ysidro (the busiest land border crossing in the world) there were US Customs agents stopping all vehicles travelling into Mexico. This was very unusual. Normally when crossing you do not stop at all unless you have something to declare -- just slow down and drive on through. In this instance, they were asking everyone leaving the United States if they had "$10,000 or more in cash or financial instruments" in their possession. I answered (truthfully) that I did not and was waved on through. They were not searching persons or vehicles as far as I could tell. It has not happened again since then, but I assume it was a test run for the real thing, still to come.
So......if you answer, "Yes officer, I have a notarized copy of the mortgage I stopped paying on 22 months ago, that's got to be worth 200K", do they arrest me on the spot, or pay off my mortgage?
1,999 silver Canadian Maple Leaf's (CAD 5) is less than 10,000.
Sorted.
According to US Customs regulations, gold can go through in/out no matter what the value. Just report it.
Same with cash. If you do not report it, then trouble comes.
this is not unexpected.
The NAFTA money laundering racket is as follows: drugs are smuggled into the USA. They are paid for with mountains of cash. This cash is of sufficient quantity as to be tough to just go and deposit or even launder in the US.
So the physical cash is smuggled into Mexico. There, it can be much more easily deposited into a Mexican bank. OK, you're saying but that just means it's in Mexico, SURELY we have capital controls in place to handle the taxation and all of this?? And you'd have been right pre-NAFTA. NAFTA was paid for by a lot of the banks for this very reason. Now, with NAFTA, you deposit in Mexico, they take a little laundry fee and then they issue you a cashier's check drawn on their branches in the USA. You come back to the US and deposit the check. Presto! The money is laundered, BY TREATY.
I saw a Frontline piece on this...as of maybe a decade or so ago, there was $100B or more sitting in major banks at the border which *could not* be accounted for as far as origin under any common accounting principles. It was obviously drug money. Miami, El Paso, San Diego, etc., 10s of billions then in just the half decade following enactment of NAFTA in the 90s in each of these cities.
Like I said, the banks were solidly behind NAFTA and they are known to be havens for drug money. If the US can interdict the cash before crossing the border, they can keep it. Once it gets into Messico, it's out of their hands. NAFTA binds very strongly; there is nothing the USG can do about these obvious drug bank accounts.
I was asked this same question 8 years ago boarding a flight to Panama from Dallas.
It is not illegal to carry more money across the border. You just have to fill out a form. You know the routine, "War on Drugs."
If you want to be obstinate you pack 199 gold coins with a face value of 50 dollars each. Since it was my idea you should probably send one to me...
Seems like they should be more worried about all those dollars floating around the world coming BACK into the U. S. -- not what's leaving!
+ [IOU]
Problem solved.
they only have to buy more gold if they have more people owning gld, not necessarily if the price goes up, right? but could be they need to buy more...
Chart: Gold
http://99ercharts.blogspot.com/2010/11/gold_08.html
http://www.zerohedge.com/forum/99er-charts
Prechter is going to be on Schiffs show in a few minutes, presumably to argue the deflation case. Should be fun...link
http://www.schiffradio.com/agnosticchart?charttype=chart&chartID=305&for...
...that debate is older than mildew...haven't both sides of the debate figured it out by now?
Robert Prechter, is one of Gordon Ghekko's favorite people.
It's often said an ounce of gold is always worth a new RICO suit
*****
Sprott's physical silver trust IPO is up 10% in less than 7 trading days:)
Instead of buying physical gold they could simply reset the NAV of each outstanding GLD share to reflect current current physical holdings, since each share of GLD = 1/10th oz of physical gold.
This is the problem with physical gold, it is cumbersome and unweildy, it does not pay an income stream and it is expensive to store securely. Good luck finding 200 tonnes sitting around gathering dust, where exactly do you propose they go out and get that much in physical gold bars ?
The whole premise of GLD for anything more than short term speculation is rediculous.
From the first line of the GLD prospectus: "Objective: Designed to track the price of gold."
You can "track the price of gold" by simply buying/selling futures contracts, they do not need physical metal to accomplish their stated goal any more than GLL needs to sell physical gold to achieve 3x short Gold, or FAZ achieves 3x short Fin's.
CFF's do not always match holding of the commodity. See UNG.
If we assume that GLD does need to add significant tonnage of gold, they might be waiting for the bullion banks to work their magic hammering the price down before they execute. This creates an interesting scenario around the Comex futures option expiration of 11/23/2010. If the bullion banks can hammer down the prices, then GLD could lock-in lower prices. If there is a squeeze and they have to cover on 11/23 then both the bullion banks and GLD could find themselves in a world of hurt on that date!
How does this work?
1) Take in customer money- customer gets credit/rights to 1200/oz gold.
2) Do nothing for months.
3) Buy gold at 1400/oz.
Didn't GLD/SPDR just lose 200?
I welcome clarification.
Fraud and/or ponzi scheme there.
That did occur to me- but aren't they illegal?
What on earth are you talking about? GLD never has to go out and buy gold, unless they are doing a secondary offering. Do you still not understand the creation/redemption mechanism?
Oh! Well okay then. Never mind.
As far as I know the only GOLD ETF which really backed with physical GOLD is from Zürcher Kantonal Banak (ZKB). A lot of other ETF are just replicating the performance of the underlying gold with commodity swap transactions. This is risky as you bear the whole credit risk againt the swap counterparty. If it defaults or doen't want to deliver your life insurance is gone.
PHYS
GTU
And CEF is about half gold, half silver
Ticker: PHYS.
I think you are forgetting that large holders of GLD like Paulson and Soros can demand phys delivery and then we shall see whether the Emperor is clothed.
as of early september soros has been dumping gld in exchange for phys... trust me
I trust you. You won't tell my husband will you?
With a screen name like yours, that is one lucky man.
Hairy, but trimmed, fellas.
Is that you VeloBabe?
Jesse Ventura discusses Andrew Mcguire with Bill Murphy and also a Bill Black interview:
http://www.youtube.com/watch?v=AvaGbb6PNbI
I ask once again and I can only assume we still have no answer. If the hit and run suspect was apprehended why has he still not been identified? Go to par.3 the NY Post specifically states "The driver was apprehended but not yet identified"
http://www.nypost.com/p/news/business/jpmorgan_chase_story_in_uk_DsMN4Pn...
for a short time there were no ask quotes stated for gold in bullionvault NY vault (10.07pm CET)
Looked at the calls this week. Too rich for my blood. I think Netfucx is a nice short here. QE2 will ramp up crime to extreme levels as the bottome 20% take it in the ass.
So lock up your daughter And lock up your wife, Lock up your back door And run for your life. The man is back in town.
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Isn't an investor better off buying some type of managed gold fund instead of GLD?
It would be interesting to superimpose a graph of GLD outstanding shares on top of the graph of their gold holdings. Do they buy gold immediately upon issuing new shares? Also, are they continually issuing new shares, or do they only do so at certain times? And if they only issue new shares at certain times, then how do they decide when to issue new shares?
I notice that GLD doesn't exactly track the gold price. For example, Yahoo says that GLD was up 1.03% today, but it says that gold spot was only up 0.17%. Could it be that they only issue new shares when the price of gold is sufficiently low compared to the GLD share price?
Good questions. And as nobody knows the net share redemption ahead of time, it can only be estimated based on correlations with previous price moves in the underlying (in this case gold). Ironically, gold bears are lucky that GLD, unlike the SPY and other ETFs, are not used as actively by the HF community to pair naked longs, due to the still modest penetration of the gold trade in what is a cash flow oriented business (hedge funds). Which means that the traditional EOD gamma hedge with stocks based on estimated ETF creations post close does not work for GLD, and in as much as on expects an ETF driven short covering squeeze it probably won't happen.
GLD has 421.5MM shares outstanding, nominally at 10 shares per oz.
They claim to have 41.6MM oz of gold.
By my calculation the shortfall (shares issued beyond oz held) is only about 16 tons, not 200 tons. They only need to buy gold to back baskets of issued shares, regardless of the price of gold.
I have no idea if they have the gold they claim to, but the amount they claim to have is pretty much right.
double post
Unless you are playing the day trader, GLD is going to burn the longs one of these days when they declare force Majeur. I guess they can resolve the fund in dollars, but at some point it's just a derivative ETF . Especially if they keep missing their buys and the price keeps crawling up . At least Sprott and CEF buy frequently. They buy gold when investors give them money. gLD takes money and sometimes buys gold, sometimes futures- mostly paper.
They are getting really close to the edge here- because they wanted to buy on pullbacks to pocket the margin but it ain't happening. Now GLD will have to buy gold bullion( doubtful) at Sept prices. Way to go idiots!
Which anti gold moron said this in February 2010
It's time to sell gold before the Fed raises its fed funds rate -- a move that should not surprise investors when it happens.
A. Me
B. Dennis Gartman
C. Peter Cohan
D. Prechter
no time for multiple choice..get back to work..lower man, lower!!
C. Pedro Cohan
http://www.dailyfinance.com/story/investing/gold-bugs-should-take-feds-discount-rate-boost-as-a-warning/19365190/
google search is a wonderful thing. I didn't really want to ruin your gold bashing fun, but nobody else answered.
http://www.youtube.com/watch?v=nwcl_rz4yVc
Good job Pete!
Im a long time silver/gold guy, and am holding for the long haul, I follow the market religously and am a little bit confused on this post. a metric ton of gold is 32500 ounces and when you take the current GLD tonnage multiplied by the spot price of gold their value estimated holdings seem to add up correctly to me per what they show on spdrgoldshares.com? I dont see how the price going up has any correlation at all to the gold they should be holding? Who knows if they have the gold or not, ETF's are not my thing, but having a good knowledge of the industry itself and seeing as how they charge a .5% management fee which on 57billion in market value would tend to be a pretty hefty sum, I guess i dont see the benefit it selling shares and not buying the gold, only to be screwed later as the price goes up, seems like a no risk proposition on their part. They buy the gold and store the gold, and charge their management fee whether gold goes up or down. Why play the market at all, they can immediately hedge themselves on the market at the current spot when they need to. Anywho, thats just my two cents, Gold is going up, scams, and ponzi schemes aside, gold is going up because people are losing faith in fiat currency, and as long as we keep printing and racking up debt, that isn't going to change anytime soon. :)
GLD will sell into maket tops usually in the period of severe price retracements. They will buy back in lower.
silver..go man go!!
gold... wOw.... silver.... WOWOW.. :)
looks like we may clear 28.00 tonight.
28 bucks, exactly..
It is amazing to me how much is misunderstood about the ETF's and GLD.
1) An etf is not a cheap mutual fund. Mutual funds have to purchase the assets they invest in with the money received by investors. ETF's have the ability (perfectly legally) to borrow the assets contributed to the basket that make up the ETF.
2) The key to the GLD is in the "Authorized Participant Agreement". These participants (the boys) are the only ones that can add gold to the ETF. They contribute gold to the GLD in "baskets" and receive units of the ETF to sell to their clients. Now what makes sense Buy gold at Spot, add to GLD at Spot, receive units at Spot(Nav) sell units at Spot to clients...get small commission........OR BORROW GOLD FROM CENTRAL BANKS....contribute to GLD, get units of GLD and sell units to Clients and, wait for it, wait for it.........KEEP ALL THE MONEY!!!!!!!!!.
The GLD is an excellent system (replacing the gold pools of old) to divert physical demand for bullion to paper. Everyone that invests in GLD is helping to suppress the price of gold.......BRILLIANT.
You see the gold even if all there in the vaults and fully allocated is borrowed...They don't have title to it.....When push comes to shove the central banks will recall THIER gold.
3) I can short GLD.....more shares outstanding than gold.
They also changed the rules on redemptions at GLD. Now if they don't have the gold they can pay off in FRN's. Is this not correct? No worries mate.
long time reader, first post
when the time comes that i anticipate a pullback in gold prices lint rate hike or consolidationl, i dont want to sell my physical. would it be advisable to short gld and keep my coins?then im hedged for the correction and could benefit if gld fraud is exposed while im short..
thoughts?
For China to rid itself of its feelings of gold inadequacy all it needs to do is buyout GLD... ( ;
GLD is not necessarily a proxy for gold buying, not even necessarily retail buying. Technically, it's the dumb money, right? This shows that gold still doesn't have widespread participation.
Tyler, GLD website cshows NAV to be 135.
http://www.spdrgoldshares.com/sites/us/value/
Who is correct?
Tyler,
Business Insider has commented on this post here:
http://www.businessinsider.com/no-the-gld-etf-is-not-overdue-to-buy-200-...
Could you respond?
Gold has been so much discussed through this recession. Gold and other precious metals are needed for manufacturing as well as investment. Copper, for example, has been in high demand for all kinds of products including Sarasota batteries.