GLD ETF Tells Customers You Can’t Have The Gold

[jeff of pa]

Today one of the most highly respected fund managers in Singapore shocked King World News when he said that custodians of the ETF GLD have refused to give people physical gold in exchange for the shares. Grant Williams, who is portfolio manager of the Vulpes Precious Metals Fund, also warned that the massive and escalating paper claims on physical gold at the COMEX warehouse are going to create an explosion in the price of gold. Below is what Williams had to say as KWN readers around the world take another trip down the rabbit hole.

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[jkoaltrades]

Today one of the most highly respected fund managers in Singapore shocked King World News when he said that custodians of the ETF GLD have refused to give people physical gold in exchange for the shares. Grant Williams, who is portfolio manager of the Vulpes Precious Metals Fund, also warned that the massive and escalating paper claims on physical gold at the COMEX warehouse are going to create an explosion in the price of gold. Below is what Williams had to say as KWN readers around the world take another trip down the rabbit hole.

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Paper tiger!

 

[pat-tekker-cat]

I was going to say, sounds like the Schulzs' and Wynwood Merc, all over again!
You know it's a bad day, when on the morning live news, the feds are chaining shut the doors to your office, and the owners are being carted away in handcuffs!
At least you can go crawl back in bed.

Doesn't anyone understand extended delivery?

 

[TreasurePirate69]

I'm always very skeptical of these kinds of stories. These "bloggers" have a vested interest in trying to drum up fear by distorting the facts. Here is the only pertinent comment in the whole article:

“Yes ... The minimum basket of shares you need now is roughly $14 million worth, and I’ve certainly heard stories of people who have taken that kind of size redemption requests to the custodians and been told that they can’t have the gold.”

So the way it works is that if you have less than $14M in gold shares you can't get the gold anyway even if you wanted it. This allows them to leverage the amount of gold they have versus how many shares are outstanding. If not a single entity held more than $14M worth of shares then technically they wouldn't need to have any gold on hand at all! Of course, this would be foolish. But it explains why the leveraging ratio can be 55 to 1 and still not be a problem. If a lot of large institutional investors have fled the gold ETF's (which we have heard could be true) then that might help explain why the ratio keeps going up. There is little need for them to keep gold on hand to satisfy demand that simply isn't there. But of course, I am just speculating.

The final part of the quote above is the real key. He claims that he's "heard stories" of people with more than $14M in shares being told they can't have the gold. Is this really true? How would he really know this? If it IS true then maybe there is something to this story. But otherwise, not much to see here in my opinion. It just sounds like another case of bloggers and media entities who have a need to sell sensationalism trying to capitalize on rumors and misinformation.

As usual, only time will tell. I'm not saying that there "couldn't" be a problem with these ETF's. I'm just saying that it sure sounds suspicious to me and they aren't really providing anything that constitutes as proof. The Internet and media are full of these wild accusations and yet, the price keeps going down. At some point you have to stop and ask yourself how that can be. Some will scream "manipulation!". Personally, I think it is wiser to put money on the notion that most of these bloggers have no idea what they are talking about and are twisting the facts to suit the needs of their pocketbooks (or at least their "religious" beliefs when it comes to PM's).

 

[jeff of pa]

I'm always very skeptical of these kinds of stories. These "bloggers" have a vested interest in trying to drum up fear by distorting the facts.

Very True.

Dealers insist Prices will Tripple Shortly

Buyers Insist the bubble has Burst, Get out now