I'm quite new to GLD but have some time, interest and capital to get into GLD. I would like to learn more about GLD beyond the prospectus, FAQs, and etc. Now one thing that has caught my eye in these forums is the following passage:
“Has anyone tried contacting State Street Global Advisors (the manager of GLD) and asking if their underlying physical assets are insured? I contacted them at 866-320-4053 to ask if the physical gold bars are insured but they just side stepped the question and said HSBC bank has “some sort” of insurance on their holdings. They won’t say directly that the GLD physical gold bars are insured but yet they also won’t say they are not insured too.
One other question that SSgA dodged was when I asked them when they plan to readjust the GLD price to reflect the actual amount of physical gold in the HSBC vault. They sell off a portion of the physical gold to pay off expenses so as time goes on, the GLD price becomes less and less accurate in tracking the actual gold price.
With all this lack of transparency, one has to wonder why not just own physical gold yourself? At the very least you would stay away from GLD’s hemorrhaging storage fees.”
The prospectus mentioned a number of times that there is a 'possibility' that GLD might not have adequate insurance for its physical assets. I'm trying to get a clarification on this but am not having any luck over the phone.
If there is no insurance, would anyone happen to know the reasoning behind it? This is the largest gold ETF after all. Thanks in advance.
I had a slightly different experience. SSGA said that there is no insurance but at the same time they said HSBC bank has “some sort” of insurance on their holdings. I couldn't get them to specify on this.
Bashers! Where is the love and trust, man? I mean, GLD has almost become a proud American institution, like Lehmann Brothers, or Fanny Mae....
Er, ah, well, anyway, you know what I mean....
Shareholders’ recourse against the Trust, the Trustee and the Sponsor, under New York law, the Custodian,
under English law, and any subcustodians under the law governing their custody operations is limited. The
Trust does not insure its gold. The Custodian maintains insurance with regard to its business on such terms
and conditions as it considers appropriate which does not cover the full amount of gold held in custody. The
Trust is not a beneficiary of any such insurance and does not have the ability to dictate the existence, nature or
amount of coverage. Therefore, Shareholders cannot be assured that the Custodian will maintain adequate
insurance or any insurance with respect to the gold held by the Custodian on behalf of the Trust. In addition,
the Custodian and the Trustee do not require any direct or indirect subcustodians to be insured or bonded with
respect to their custodial activities or in respect of the gold held by them on behalf of the Trust. Consequently,
a loss may be suffered with respect to the Trust’s gold which is not covered by insurance and for which no
person is liable in damages.
if you read the prospectus the lack or clarification on the insurance should be the least of your worries. did you see the part about not guaranteeing the fineness of the gold? what about the fact that they may not meet the london good delivery standards? to me this is much more concerning than whether or not they have insurance as it implies they may not have real gold or the gold they have may be filled with other alloys. there is no mention of a minimum fineness, heck it could be .0001 or .0000, who knows. to me it's just another bank instrument to make money via fees off an unsuspecting public.
before we start talking about the big names that own this etf; 1. they're apart of the banking system, 2. they're big enough to take delivery; and 3. they've all been scammed before wether it's soros and LEH or Paulson and his china timber fraud. none of this bodes well for the safety of gld holders.
Are you certain? I remember reading about a minimum fineness of 995 parts per 1,000. Perhaps the prospectus was updated since you last read it? I'll look at it again to be certain later.
Listening to ultra-Marxist, vensh, will bankrupt you. Making LOANS to bond and stock issuers in this corrupt and controlled market is like asking them to please not take the money and run. John Corzine can educate you on that fact. Of course, do what you want, it's your money.
Precious metals are considered to a useful part of a balanced portfolio. You’re not going to get any useful information here, so do your own research.
You will learn that over long periods of time, bonds and stocks have killed pm.
You will also learn that the costs and fees of buying, storing and selling your own pm exceed costs associated with funds such as this one. Funds also make it easier to enter and exit the market.
It’s possible that this fund is a giant scam. But it’s been used by investors for some time without any problems. And one can never be sure that the pm you’re getting from any source is legitimate and properly assayed.
Go study up.
Forget about this POS. Paper gold market is rigged and used to control the REAL deal, physical gold, but the charade isn't going to last. Put your money into real physical gold and silver and beat the crooks at their own game. Good Bye.
You should be glad they didn't hang up on you or worse. Insurance is just part of the problem with GLD. Everyone knows about the missing redemption feature and the nonexistent means for the average investor to verify the physical assets. What compounds upon all these issues is the fact that State Street was recently caught cheating their clients.
What's stopping that very same organization who manages GLD from defrauding more people? Certainly not insurance because there is none for GLD's physical gold. You can see the prospectus is full of language that 'limits' their liability. They escaped the Carina CDO incident with $5 million in fines while investors suffered a $450 million loss. Have to be wary around these con artists lest you find yourself their next victim.
"You should be glad they didn't hang up on you or worse." Or worse?
I did read a bit on the Carina CDO event. I will have to revisit those articles again for a more thorough examination. And yes, I'm also well aware of the issue with redemption. It's something I'd prefer to have but am willing to deal with the lack of it.