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'm more than willing to bet that GLD will fold like a deck of cards if it was ever discovered that there was no real gold behind GLD. Heck, even the sketchiness of GLD's insurance is enough to keep me away from this shady investment vehicle.
I tried to dig up information on GLD's insurance a long time ago and turned up nothing. The notion that GLD has any definitive insurance is laughable. Even if GLD's prospectus mentioned HSBC holding some kind of insurance policies, they are largely non-existent as proven by SSgA's inability to specify on these policies. No one to date has been able to answer: just how much of GLD's physical gold is insured?
So I see the state of the HSBC insurance policies on GLD's gold remains undisclosed. After all this time, what could they be hiding? What do they have to gain from being obscure about GLD's insurance?
Interesting. I have actually called in to ask specifically about GLD's insurance before. I didn't think much of the reply I got which was they essentially don't insure the gold. I did not ask specifically about HSBC's insurance policies nor for any numbers behind these insurance policies. This was likely the reason I missed all these sketchier aspects of GLD's insurance.
When people talk about the costs of investing in gold, the costs usually refers to transportation, storage, and insurance. Many GLD investors are probably oblivious to the sketchy GLD's insurance but investors who want clarification on this subject are justified. Exactly how much of GLD's assets are insured? The million dollar question.
I tried researching GLD's insurance recently and it seems you are right. I specifically asked for numbers on how much of GLD's assets are insured and they just gave me a bunch of excuses. One excuses revolves around the "daily changes in amount of gold". Surely they can still insure a majority of the assets based on an average. Another excuse involved the 'event' that occurred. I was given some ridiculously farfetched examples such as physically stolen gold or war destroying the gold. A more reasonable example would be fraud but I digress. In any case, this does not justify the lack of insurance at all. It seems as if they want to cling onto this line of credibility even if they really don't have insurance.
This was the response I got when I asked for numerical specifics on HSBC's insurance policies. They beat around the bush and give out random situational excuses. In the end, they were unable to give a clear cut answer on just how much of GLD's assets are insured. Why would they hide the numbers behind GLD's insurance?