Did anyone try reaching out to State Street Global Advisors and asking if GLD's physical assets are insured? I contacted them at 866-320-4053 to ask if the physical gold bars are insured. They said that there is no insurance but at the same time they said HSBC bank has “some sort” of insurance on their holdings. Why won't they specify on this 'insurance'?
There are not many ways for the average investor to validate GLD's physical assets. Even the prospectus is full of legal writing removing liability. On top of everything, the GLD manager - State Street, has been shown to be less than trustworthy (Carina CDO, multiple instances of forex fraud). Is there a shred of credibility left in GLD?
I am a relatively new GLD investor so this insurance issue is quite interesting to me. So SSGA is still not disclosing information on GLD's insurance? I will make a call and see this for myself.
There is no chance that GLD has any proper insurance for its physical assets even though there is mention of some sort of HSBC insurance policies in the prospectus. If you were to call, your best bet is to ask specifically about HSBC's insurance policies. There is no reason for them to deny that when it is stated in the prospectus.
It is pretty obvious they do not feel the need to substantiate GLD's credibility even if there some very sketchy elements to GLD.
Where is the logic in being intentionally blind about aspects of your investment? Why do you care what other people asks about GLD? Is there something more to hide that I'm missing here?
I don't find these questions pointless. As one of the relatively newer GLD investors, I find the questions to be very insightful. Especially the rumor of "For years there has been the GLD question of loaning bullion against futures contracts, a lucrative process but with counterparty risks as you point out."
It has been a long while since I last looked at this issue but I'll throw in my 2 cents. I'm not surprised about the continued lack of disclosure considering the history of SSgA. SSgA tends to hide information for their own benefit - recent example: http://www.reuters.com/article/2012/08/03/statestreet-forex-arkansas-idUSL2E8J3EJ320120803?type=companyNews
Good read, thanks for the link. I'm leaning towards "For years there has been the GLD question of loaning bullion against futures contracts, a lucrative process but with counterparty risks as you point out." as that makes the most sense. Why else would they go through this extent to hide the state of GLD's insurance?
You're correct on that as I was one of those people who asked about insurance in general. I was not aware of the actual obscure issue to be specifically behind HSBC's insurance policies.
SSGA is playing on words for this one though. When someone calls in to ask about GLD's insurance, it should be assumed to be an all inclusive insurance inquiry. Instead they play on words to avoid detailing HSBC's insurance policies.
Yep, heard that song here:
Though those investors should have known the risks in trusting a less than honest firm.