As I feel this is still an outstanding issue of GLD, I will repost this here:
Did anyone try reaching out to State Street Global Advisors and asking if GLD's physical assets are insured? I've personally called them at 866-320-4053 to ask about the state of GLD's insurance. They said that there is no insurance but at the same time they claimed HSBC bank do have insurance policies on their holdings. I could not get them to elaborate on this 'claim'.
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). Where is the credibility in GLD?
This is just for anyone who intends to call and ask State Street about GLD's insurance. You have to state that you're looking for numerical specifics on GLD's insurance AND that it is not in the prospectus. I just got a State Street representative named Chris who feigned ignorance. He pretended he didn't know that the prospectus did not have numerical details on GLD's insurance. He kept beating around the bush telling me to go look at the prospectus when I am certain that the prospectus have no such specifics. These GLD representatives from State Street are real rats.
I thought they stopped using these stall tactics. Most investors will easily find out that the GLD prospectus has no numbers on insurance even if they never did a comprehensive read through on the prospectus. This GLD marketing firm is trying pretty hard to hide the truth here.
Wait a second, is State Street still claiming that GLD is fully insured? I caught them on this lie a long time ago and reported it to the World Gold Council. The World Gold Council confirmed that this claim was false so I'm surprised that State Street would still make this claim. They are knowingly lying at this point if they claim GLD has full insurance on its assets.
Rather than listening to some craft lying bankers from State Street, just read the prospectus in full. There is no substitute. GLD is much sketchier than it seems despite how hard its marketers try to pump it.
I wonder how many investors don't know about the significant possibility of bullion lending in GLD. The prospectus does a good job of defining liabilities to cover the rears of GLD organizations. The prospectus doesn't say a word against bullion lending to protect investors though.
What was it that frn guy said? Something like:
Insurance is just one of its weaknesses. I doubt that there is insurance on the gold stash, for it would open a can of worms that State Street would avoid. The insurer, of course, would want to know about safety, access, audits, claims on it, etc to even come up with a premium for the insurance. Now, State Street would never accept such intrusion, in part because the gold stash is probably used for all kinds of shady purposes, including backing shorts.
Just read the part in GLD's prospectus where the custodian subcontracts to subcustodians but has no right to audit or visit the subcustodians' vaults. It then requires third-party audits. So we can have the custodian own or pay off the third-party auditor to give a clean audit, while knowing that the subcustodian leases out the gold into the market.
If GLD shareholders suspect so and ask custodian to prove otherwise, custodian can simply say "we have no right to check the subcustodians, see the prospectus, but here is a clean audit result" however laughably compromised.
If GLD or State Street goes bust, no holder of GLD has any claim to any gold. GLD holders simply become unsecured creditors along with all other creditors, with no precedence in bankruptcy court.