1100 Tonnes Now in the GLD Trust

This graphic only gets updated when the world's most popular gold ETF, SPDR Gold Shares (NYSE:GLD), reaches a new milestone - either a one hundred tonne increment in holdings (amounting to about $3 billion in net assets) or when it passes a country's central bank holdings (GLD passed Switzerland a couple weeks ago).
It only seems like this chart appears here a lot because the ETF is adding "tonnes to the trust" at a furious pace - 323 tonnes so far this year, an average of six tonnes per day.

Full Disclosure: Long GLD at time of writing.

Comments

[roy piper:]

I believe that GLD states they do not use futures or make loans or any such thing. In fact, yes, they do own 1100+ tons of gold. Every day they update their complete gold bar list and tonnes on their website. My issue is that in the prospectus they list the ability to use sub-warehousers of the metal and that they cannot verify those holders. This is a VERY big loophole! They do not hold all the gold in one warehouse and do not mention the sun-holders. I am a big holder of GLD but this makes me nervous.

Mar 20 01:26 PM

[RJS Jr:]

Can anyone confirm whether GLD leases its gold bullion in the same way that the central banks do? I own a decent amount of GLD, but am concerned about a potential short squeeze and counterparty risk.

Mar 20 03:22 PM

[GeminiAtlas:]

Also, there is the threat that if things really go down the tubes (which is a miniscule but real possibility), the US government can just seize the GLD hoard(s). Yoink! "Thanks, GLD Trust, for keeping this metal for us, we'll be taking care of it from here on out, don't let the vault door hit you on the way out."

Mar 20 04:49 PM

[Lee Eugene ...:]

RJS Jr,

Great question and most people never bother to read the fine print. As a professional money manager I am forced to go over this information. Here is what the trust says about leasing, etc.:

"Gold held in the Trust’s allocated account in bar form or credited to the Trust’s unallocated account is the property of the Trust and is not traded, leased or loaned under any circumstances. "

Hope this helps,
Lee Eugene Munson



On Mar 20 03:22 PM RJS Jr wrote:

> Can anyone confirm whether GLD leases its gold bullion in the same
> way that the central banks do? I own a decent amount of GLD, but
> am concerned about a potential short squeeze and counterparty risk.

Mar 20 04:53 PM

[foxy 44:]

skipper
read this data about GLD:

www.marketskeptics.com...

Mar 20 05:00 PM

[lokiUnbound:]

I would consider using GTU (centralfund.com) instead of GLD. GLD is taxed like gold, at the 28% collectible rate. GTU is a foreign passive investment.

Also see centralfund.com/pfic/P... .

That said, I am not an accountant, so please check for yourself.

Mar 20 05:08 PM

[balois:]

Along what is said above, to my knowledge, the Zurich Cantonal Bank Gold ETF is one of the very few funds where one has access to the physical underlying.

Excerpt from the term sheet

"...The right to payment in kind is limited to the standard unit of bars of around 12.5 kilograms with the customary purity of 995/1000 or better..."

www.swissfunddata.ch/f...

The alternative is actual physical gold through a gold bar account available at some of the major international banks with their own vaults, assay.
The order has to be worded along: Gold bar of 1 kg 999.9 fin xxx piece (s) weight 0,99999 kg or 32,148 ounces, separately stored, physically deliverable at all times in xxxx to xxxx, free of any lien, no lending, not part of the custodian banks assets in case of bankruptcy, lack of liquidity, credit or any other similar event. If not worded that way, the bank will open a precious metal account which is only worth the paper it is written on if the bank fails.

have a good day

Mar 20 05:40 PM

[igggy:]

I am waiting for the day when they'll report they have more gold than is physically available in the world. Sort of like when CSCO was going to be bigger than the US GDP.

Mar 21 12:38 AM

[billyboy54:]

I switched most of my gold money out of GLD into GTU late last year, and have been very happy with the move.......

HOWEVER, just after I did this, GTU issued new shares, the proceeds of which they said they use to buy more gold, so they don't see it as dilutive.

As a result of this, which I wasn't aware was going to happen, their share price dropped around 15% in one day, shortly after I had bought in. It was a heart stopping event, as I have quite a lot of money in gold !

The great thing was, when I called them at the number on the website, in Ontario, a real woman picked up the phone immediately -- no zombie phone rigamarole --, and talked to me for around 20 minutes, reassuring me that "don't worry, the share price will be back up on a few days" (it was).

They say on the web site they'll do this "from time to time"........in fact, I bought more shares at the lower price, and it's rebounded nicely, but the practice it seems to me is almost sure to reinforce short term speculation.

It's thinly traded in NY (less than 100K yesterday), and the share price is about half of GLD, so you get more bang for the buck -- but yesterday it was up about 0.43, while GLD was down.

AND it's based in Ontario, which I trust for some reason, more than the sharks in NYC.......go figure !



On Mar 20 05:08 PM lokiUnbound wrote:

> I would consider using GTU (centralfund.com) instead of GLD.
> GLD is taxed like gold, at the 28% collectible rate. GTU is a foreign
> passive investment.
>
> Also see centralfund.com/pfic/P... .
>
> That said, I am not an accountant, so please check for yourself.

Mar 21 09:09 AM

[gooter:]

Cost of risk for being in GLD vs. the physical metal is the 8-10% premium on physical + storage. Like any investment, gamble one way or the other on the risk. If it's (GLD) a cheesy piece of worthless paper, I'll happily buy it if I can sell it at a good return, regardless of how a bug feels about it.

Mar 21 09:49 AM

[Econ Base:]

Is this 1100tonnes figure audited to be physically sitting in the GLD vaults? How frequently is the audit and who is the auditor?

Mar 21 10:44 AM

[USisCorrupt:]

I am will to bet that it is NOT real GOLD but paper contracts. The entire U.S. markets are just one GIANT Ponzi scheme!

And when that house of cards ends up collapsing the ONLY true Gold holders will be those holding Physical Gold.

Keep those printing presses printing for it will only end up as an even greater increase in the value of REAL Gold.

You can stuff the paper gold and the U.S. Currency up your arse.

Mar 21 01:15 PM

[optionsgirl:]

What is clear to me from the comments on this article is that many people do not understand the various etf's and trusts, and exactly what they are investing in. Read the prospectus. Go online and get the latest prospectus-because they do change from time to time. (For instance, the SLV prospectus used to save silver bullion, but the word bullion was removed, now it says invests in silver).
Any questions after your review should be directed to your broker and/or the underwriter's customer service department. No one will protect you, certainly not the SEC or the Treasury Department-so we all need to do everything possible to understand our investments. If any one is investing in the precious metals etn's, understand how these differ from etf's.
Caveat Emptor, and good luck to us all...

Mar 21 01:39 PM

[foxy 44:]

no audit, please read ;

www.marketskeptics.com...

parts 5


On Mar 21 10:44 AM econ_base wrote:

> Is this 1100tonnes figure audited to be physically sitting in the
> GLD vaults? How frequently is the audit and who is the auditor?

Mar 21 01:47 PM

[nextpillart...:]

China is & will be the buyer of Gold when GLD has to sell it. China recently suggested that it was uncomfy with all its US treasuries. Next thing we hear is that the FED says they will buy $300billion of US treasuries, you know the quantitative easing scheme announced this week. China will be net seller of US treasuries & a net buyer of gold...a real store of value rather than us treasuries which are at bubble pricing & yields. This is a possible black swan event, that is when china sells US treasuries in earnest & goes for the gold with the proceeds.

Mar 21 04:37 PM

[theobannion:]

You've never heard of phantom gold? What's with you? One day, someone will walk into one of the GLD warehouses and find it filled w/ yellow helium balloons (explains why gold goes up).

When I want to play gold, I use the DB double or inverse double, DGP or DZZ. Then all I have to worry about is the survival of Deutschebank.

May Santa drop gold coins in your Christmas stocking.

SOB.

On Mar 20 12:05 PM chazgil wrote:

> I just want to know where they are getting the gold from? COMEX deliveries
> are not increasing, central banks are not selling and China and Russia
> have stated that they are increasing their holdings. So where is
> the tons of gold coming from?

Mar 22 02:39 PM

[the humble ...:]

Who said Central banks are not selling?


On Mar 20 12:05 PM chazgil wrote:

> I just want to know where they are getting the gold from? COMEX deliveries
> are not increasing, central banks are not selling and China and Russia
> have stated that they are increasing their holdings. So where is
> the tons of gold coming from?

Mar 22 05:41 PM

[lokiUnbound:]

Further to GTU - as billyboy54 said, be very careful when going in. They currently have a 30% premium. I think it's because they don't issue new shares immediately (and buy new gold), as demand rises. Probably have to wait until a new offering (such as happened in Jan) for the premium to reset to something more reasonable. Read the NAV page before you jump in.

Mar 25 04:02 PM

[undertarg:]

If people would read the prospectus on the GLD web site a lot of this conjecture would clear up. If you want to pick up your gold bullion bars from GLD you can, so long as you work it through your broker. Read and learn,

The bullion is moved back and forth by sub-custodians at the custodian HSBC Bank in London, from the seller's vaults to buyer's vaults. GLD buys gold bullion bars from the market as needed to keep the notional value in line with $US price of gold in London. They only sell gold to pay fees. The Trustees of GLD denote each bar in possesion at the close of each market day.

They are audited regularly and the auditors have authority to inspect the vaults at the custodian.

They are not allowed, by definition, to trade any future contracts or lease their gold. When they buy bullion in a futures contract they must take delivery to maintain the NAV of the fund.

However, they do not insure their gold, that is a question of
low risk, because the stuff is durable, heavy and shows up on a metal detector. They are protected from custodial malfeasance by the courts.

So, as they say, its money in the bank, baby.

Mar 26 02:48 AM

[daniel_kuwait:]

I am looking for real sellers of gold bullion bars 12.5 KG. If interested you may contact me on [e-mail]

I represent 2 buyers who seek around 150 MT/month with rolls and extentions for 12 month period.

Nov 02 05:29 AM