Gold and Silver ETFs "Backed Only By The Good Faith Of Banks and Brokerages"

GoldCore's picture

Today’s AM fix was USD 1,591.50, EUR 1,221.98 and GBP 1,062.42 per ounce.

Yesterday’s AM fix was USD 1,582.50, EUR 1,216.37and GBP 1,065.30 per ounce.
Both gold and silver rose by almost 1% yesterday. Gold rose $12.20 and closed at $1,593.30/oz. Silver closed at $29.15/oz.

Gold remains near the highest level in almost two weeks on prospects of further currency debasement from central banks in Europe, Japan, the UK and the U.S. and continuing robust physical demand in Asia.

The spectre of stagflation threatens the UK economy due to concerns that sterling weakness will contribute to even higher inflation amid very weak economic growth and the likelihood of a recession – likely a severe one.

Markets are pricing in a jump in inflation as inflation expectations, as measured by the difference between nominal and inflation-linked bond yields, ticked up to near 3.3% yesterday.

Recent poor economic data and the appalling UK fiscal position are rightly leading to concerns of stagflation as was seen in the 1970s. Conditions that make owning gold and silver vitally important to own in order to protect and grow wealth.

The ECB confirmed that they will maintain their accommodative stance “as long as necessary” and the Federal Reserve and BOJ are committed to ultra loose monetary policy for the foreseeable future.

Gold in GBP – YTD (Bloomberg)

U.S. asset manager Van Eck Global has filed with the SEC to launch two gold and silver exchange-traded funds that will allow investors to redeem their shares for physical precious metals.

Van Eck Global has offices around the world and managed approximately $36.6 billion in investor assets as of December 31, 2012.

Silver in GBP – YTD (Bloomberg)

The two new products will add to Van Eck's line-up of commodities-focused ETFs, including its Gold Miners ETF and the Junior Gold Miners ETF and mutual funds.

Van Eck filed its regulatory papers late on Monday. The gold trust filing says a "secondary objective is to provide investors with an opportunity to invest in gold through the shares and to be able to take delivery of gold bullion in exchange for their shares."

Most precious metals ETFs do not allow their shareholders to take physical delivery, and those that do often charge a higher management fee to offset the extra costs related to physical redemption.

There are currently about 20 major global gold- and silver-backed ETFs, and dozens other exchange-traded products “backed only by the good faith of banks and brokerages” according to Reuters (see News).


Tonight at 19:00 GMT, everything you need to know about Silver in 60 minutes. Details here.



Spectre of Stagflation Haunts UK - FT

Gold Trades Near Two-Week High on Stimulus, Rising Asian Demand - Bloomberg

Gold holds near two-week high on euro zone concerns - Reuters

Van Eck files to launch redeemable U.S. gold, silver ETFs - Reuters


"Sell JPY, Buy Gold, and Go To Sleep" - Zero Hedge

My Switch From Gold to Silver Mantra - SilverSeek

Fed's Exit Can Only Be Debt and Currency Devaluation Via Gold - GoldSeek

Gold Breakout Attempt with Higher Volume - Got Gold Report



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NoWayJose's picture

If paper PM ETFs did not exist, the big banks would invent them so that they could naked short them and hold the price of real PMs down.

tenpanhandle's picture

GLD and SLV themselves represent a naked short on the physical metal.  Your statement seems to be saying -if the sky was blue it would be blue.

Jack Sheet's picture

1. Bullion banks sell shares in GLD and SLV to the sheeple and buy bullion with the funds.
2. They sell the sheeples's shares short and send their trucks in to collect the physical
simple really

thewayitis's picture

   Buy the  PHYSICAL Folks ......No one will be between you and the REAL thing. Gold or Silver .

tony bonn's picture

"...Most precious metals ETFs do not allow their shareholders to take physical delivery..."

of course not, which is why most of them are frauds....nor do they specify the purity of their gold....etfs are part of the bankster gold suppression cartel....when the bullion banks need gold, and they very frequently do, to ship east, they raid the etfs....

in any event, the gold suppression scheme is used by banksters to raid their companies of gold and to fill their own coffers - i do not exaggerate....the only people who won't be laughing in a year or two are those who do not own gold....

honestly i think this latest etf endeavor is a fraud...the bullion banks raided mfglobal and peregrine for their gold with government consent.....etfs are to be avoided like the plague....

akak's picture

A question regarding presumed precious metal ETF fraud.

I have read many objections and suspicions raised against the gold and silver ETFs, notably against the largest and most prominent of them, GLD and SLV.  However, I have never read of any similar such suspicions surrounding the much smaller and lesser-known platinum and palladium ETFs, namely PPLT and PALL. 

Does anyone here know much about these two ETFs, and whether they appear to be operating as shadily as the GLD and SLV?

Ban KKiller's picture

I don't pay you to keep my chickens so someday I can someday get some eggs. I keep my own chickens and get the eggs everyday. So...why would you pay someone to, perhaps, keep all your PM with the "promise" to give it all back to you "someday" when you really need it. Calling Mr. Ponzi!

Lordflin's picture

Morning smackdown in metals... after several years of buying pms I am use to it... sort of. No point in getting angry as I can't change it. On the other hand I will continue to stack.

Many notable goldbugs seem to think this is the last hurrah before metals skyrocket higher. There is allot of reference back to 1979... the idea being the bullion banks will suddenly jump to the long side of the trade to make a huge profit. However, in 1979 we were not staring a currency collapse in the face. I do believe this time is different. The banks, in bed with the Fed, in bed with the politico/corporate fascists have too much invested in paper to allow a collapse... which would certainly be threatened... at the least... with a sudden uptake in the metals.

In the long run pms are the place to be. And unless you are prepared to play Russian roulette in the market place, the only place to be. Personally I have no intent to ride that train hoping to get off one stop before it crashes... but that's just me.

Sinclair claims we are on the verge of 3500 dollar gold... and his opinion carries more weight than mine. But so long as the suppression continues the fire sale continues as well.

I will say this... after the AM takedown the market seems to bounce back quickly. Sinclair attributes this to idea that those involved are not the deep pockets and therefore the morning plunge off the cliff does not carry the weight... Explanation makes as much sense as any... He suggests this as a basis for calling a floor. My experience of the past few years would not contradict this position...

SubjectivObject's picture

I refer to it as the Whack-A-Mole market.

They'l keep it down, until they can't.  But it will always be trying to pop.

The proverbial pop cannot be timed, especially by the peon demographic. 

The degenerating conditions for stability and the increasing liklihood of a (pick your swan color) fail event are the basis for consistent stacking by the peon demographic.

Canadian Dirtlump's picture

Nice to see my beloved silver get the shit thrown out if it. Goddammit.. I'll take the collapse now thanks, I'm ready.

Canadian Dirtlump's picture

Downvoters deserve a stiff beating with a sweatsock full of my maples.

spooz's picture

This is more a condemnation of ETFs in general than gold specific ETFs.  The focus on gold and silver is illogical.

akak's picture

Not really, because the agricultural or energy ETFs, for example, do not even claim to hold warehouses full of wheat or tankers full of oil to back their exchange traded funds, unlike the precious metals ETFs.  They are a pure financial derivative, and make no bones about it --- not so with GLD and SLV.

Ghordius's picture

in the realm of base metals - copper, zinc, nickel, etc - the warehouses do exist and are used to cover shortages in the supply chain with direct impact on prices. GLD and SLV try to look like those

akak's picture

But how can the base metal ETFs sell off their physical stock "to cover shortages in the supply chain" without a corresponding selling off of shares by the holders of those shares?  What if more shares in an ETF are being bought than sold even, or especially, during a supply shortage of that particular metal?  Is not the physical stock of any particular ETF fundamentally determined by the collective buyers, sellers and owners of all of its shares, NOT the ETF management itself?

tenpanhandle's picture

I think I remember something about a copper based ETF, some time ago.  Other than that are there any base metal ETF's?  What do warehouses full of zinc etc. have to do with an ETF?

Toolshed's picture

Does your facial orifice ever excrete anything besides spooz?

spooz's picture

oh, my, did I attack your confirmation bias or are you a shill talking your book?

Bay of Pigs's picture

It's foolish and useless to buy any ETF. Why have other people and institutions between your gold and silver and your own two hands?

lotsoffun's picture

it's called speculation.  as in 'i'd like red seven'.

marchare's picture

Only if you are stuck in a self-managed 401-k, 403-b, ira, roth etc.

GreatUncle's picture

It is not just an ETF's though, it goes much further.

Place your money in a bank and you get a bank statement to show precisely how much.

OutLookingIn's picture

Rule of simple ownership:

If you don't own & hold it, then -

YOU DON'T OWN IT! Someone else does.

The old addage; possesion is 9/10 's of the law.