The Gold in GLD

September 1, 2011Many people are suspicious and doubt that the SPDR GLD ETF actually has all the physical gold it says it has. Here’s a CNBC video, where Bob Pisani was one of the few people in the world who was able to visit HSBC’s vault somewhere in London and was able to see all those beautiful stacks of gold bars.

This may have eased some suspicions, but some are still concerned. Some people suspect that the GLD ETF may not have sole ownership ties to these bars of gold due to central bank gold leasing programs in addition to the fact that there isn’t enough physical gold in the world to back the volume of daily paper trades in the gold futures and options markets.

Update
September 9, 2011Wow, talk about trashing a concept – here’s a video that lays out all the weaknesses in the GLD prospectus. As you watch the video and learn about the prospectus, keep in mind the three main players behind the SPDR GLD Shares:

• Sponsor: World Gold Trust Services LLC, a “wholly owned subsidiary” of The World Gold Council
• Trustee: The Bank of New York Mellon
• Custodian: HSBC. (Named after its founding institution, The Hongkong and Shanghai Banking Corporation Limited, back in 1865.)