Actual GLD Vault
There seems to be a misunderstanding in the gold market that when you buy or
sell shares of GLD you are putting pressure on the price of gold. That
selling shares of GLD into the exchange is somehow analogous to selling physical
into the marketplace. Or that buying shares of GLD is somehow, somewhere down
the chain, removing physical gold from the marketplace.
We often look at apparent correlation and assume a certain cause and effect.
GLD is designed to track the price of gold. It is not actively managed
to track the price of gold. Instead, it does so through opportunities that
arise whenever it doesn't. Imagine GLD as a big lump of gold just sitting
there in Town Square. The price of gold is "discovered" elsewhere
and shares in this big lump just trade based on that elsewhere-discovered
price. If the share price is too high, then an opportunity exists to sell
your share and buy "gold" elsewhere. Likewise, if it is too low,
there is an opportunity to sell elsewhere and buy into this lump on display.
Occasionally, lately, someone comes along and shaves a chunk off of the lump,
reducing its overall size. And financial reporters and analysts everywhere
are struggling to correlate the price of gold and the GLD holdings with some
semblance of cause and effect:
The Street – Alix Steel
Gold prices were breaking even after another double-digit selloff Tuesday as
their holdings. The SPDR Gold Shares exchange-traded fund dropped more than 30
tons of gold on Tuesday.
Traders in Asia reported strong physical gold buying, particularly from
China, on Friday, but large bullion-backed exchange-traded funds continued to
Reuters - Amanda Cooper and Jan
But investor sentiment
towards gold has soured in the last few sessions, as evidenced by the largest one-day outflow
in three months from the world’s biggest exchange-traded gold fund.
Holdings in the SPDR Gold Trust fell 10.926 tonnes
to 1,260.843 tonnes on Jan 24.
Funny. When we're talking about gold,
an outflow to one person is an inflow to another, is it not? Randy Strauss at
USAGold.com rightly responded to these silly reports with the truth [emphasis
Silly reporters. Instead of calling
these “outflows” from the ETFs, it should be called what it is
— a redemption of a basket of shares
for physical gold by the Authorized Participants (e.g. bullion banks).
Such share redemptions would actually be a bullish sign because it entails a
reduction in the global supply of paper gold while at the same time
signifying a preference by the redeeming party for having the
metal over the ETF shares. That is, of course, unless the drawdown in
physical gold merely represented the routine sales of the gold inventory that
occur to cover the ETF’s administrative expenses.
RS View: I’ve
said it before and I’ll say it again now, the reporters are getting it
wrong when they equate outflows of gold from the ETFs with “sour”
investor sentiment. What they need to work harder to understand is that these
are NOT actively managed funds whose gold inventory is tweaked to ebb and
flow based on public sentiment in the shares. Instead, the ETFs are more
like a central coat-check room in which the various bullion banks have
temporarily hung out their own inventories (i.e., meaning, their unallocated
stock which they hold loosely on behalf of their depositors). And whereas the
claim tickets (ETF shares) may freely circulate on the open market, any
significant outflow of physical inventory is simply and primarily indicative
of a bullion bank reclaiming the original inventory based on a heightened
need or desire for physical metal in a tightening market — for example,
to meet the demands emerging from Asia.
Here's another one. I found this to be an interesting post, even though the
blogger is toeing the same line as the reporters above [emphasis mine]:
Usually in a bubble, investors are holding a bag.
Investors have been net
sellers of about 100 tonnes in the last 7 months.
The IMF has disposed of another few hundred tonnes.
Yet gold price is higher by around 10% in the same period.
To put this into context,
since December 21st alone, 2.2M ounces have been sold from the ETF, basically
a bit more than an entire quarter of production from Barrick
world's largest producer). The normal run rate of global recycling plus mine
production is approximately 2.95M ounces per month. So in the same period,
assuming GLD was the only source of outflow, total global absorbed gold
supply was 5.15M ounces. If outflows continued at the current rate, the
GLD ETF (the largest investor depository of gold by far) would have no gold
in 18 months.
Supply increased 75% in the
short term to see price only fall 4.5%.
Someone else is doing
the buying, clearly.
2.2M ounces is more than 68 tonnes...
since December 21! Who is taking this stuff?
Now here's a bloodhound that might be on to a scent worth following. Lance
Lewis, in his subscriber newsletter, follows what he calls "the
GLD puke indicator" which tracks GLD physical gold
regurgitations [emphasis mine]:
Just in case anyone missed it in last night’s
letter, our GLD puke indicator that has nearly a flawless record at marking
lows in gold triggered a buy signal yesterday after the ETF spit up 31 tonnes (and some blood) to trigger a 2.48% decline in its
As we’ve noted before, one-day declines in the holdings of this
ETF of over 1% have tended to be capitulatory in nature and have typically
occurred near important lows in the gold price during gold’s secular
Consider that since the GLD
ETF’s creation back in 2004, it has seen 1%+
one-day declines in its bullion holdings only 41 other times. When one goes
back and looks at where these declines in bullion holdings have occurred, virtually all of them occurred “at” or
were “clustered at” important lows in the gold price.
When we update this familiar
(see above) chart for today’s 1%+ decline in bullion holdings, we can
once again see where I have labeled the past eleven 1%+ declines in the
ETF’s bullion holdings (plus today’s decline) with red dots and
then placed a corresponding white dot below the price of GLD in order to show
where that decline (or clusters of declines, as was the case in 2008)
occurred relative to the price of the GLD, which is obviously tied to spot
You will recall that we most
recently used this indicator back on July 28th, 2010 in order to identify what
was then the summer low in the gold price, and we used it again on October
7th, 2010 to recognize that a sudden 1 percent slide in gold from an all-time
high was actually a just a one-day setback that led to new all-time highs
being hit once again just a few days later.
The pattern you see emerge
after today’s 1%+ puke, just as on those prior occasions, is that these
“pukes” of bullion by the GLD ETF have always tended to occur at
or very close to important lows in the gold price, and declines of over 2%
have only occurred at MAJOR lows, such as the two major lows that were hit in
Note that one of those lows
on September 9, 2008, which is the closest in size to today’s puke,
also occurred just one day before a 5-day short squeeze/meltup
of 30 percent in the gold price that kicked off on September 12, 2008.
Perhaps the remaining shorts in the gold market will now pay a similar price
for betting against a bull market?
Perhaps history will repeat
and perhaps it won’t with respect to such a short squeeze, but given
this indicator’s near flawless record at marking lows in gold, it's not
to be ignored.
What we appear to have here is a severely tight noose around the supply of
Bullion Bank deliverable physical gold at a time when the Giants are chomping
it up! Bullion Banks have many means at their disposal to shuffle around a
globally limited quantity of gold reserves and get it to where it needs to
go. Especially when "important clients," like those in the East or
Middle East, come calling for physical delivery or allocation.
Upon getting requests from unallocated depositors for either outright
withdrawal, or more simply for transfer into allocated accounts, any Bullion
Bank has options. Yes, it can seek to acquire (through borrowing or purchase)
the requisite ETF shares for redemption of a "basket" in its
special capacity as an Authorized Participant of GLD, or it can pursue
alternate avenues such as buying gold on the open market or, better still,
borrowing it from either its own unallocated pool of deposits or turning to
other members in the BB fraternity to borrow the adequate quantity to cover
the immediate needs. Whatever combo is deemed most efficient or
cost-effective is what the bank will do.
But what if those other options are disappearing faster than a sack of
currency left on the COMEX trading floor? If gold (in size) on the open
market is scarce, the unallocated pool is spoken for (in other words,
undergoing allocation) and the fraternity brothers are all suffering the same
noose, what do you think becomes the most efficient and cost-effective
option? Raiding the GLD reservoir perhaps?
Did you even know that you could take physical delivery from GLD? Apparently
many didn't. I was just chatting (online) with one of my supporters
yesterday, let's call him "Small Giant" (a term explained in my last post) because he is in that eight figure savings bracket that might
find this information useful. On top of that, he makes his living assisting
funds in their management of eleven figures.
So he says to me:
Small Giant [6:10 P.M.]:
I think very very few people realize that you can
convert GLD shares to actual physical
Small Giant [6:10 P.M.]:
can't say I know of anyone who has ever done that
Okay, let me back up.
Small Giant [5:47 P.M.]:
there is clearly panic in the ranks of the longs
FOFOA [5:47 P.M.]:
The more it goes down, the bigger the pressure on physical. I think the draw
down in GLD suggests other options for physical delivery in size are gone.
Small Giant [5:47 P.M.]:
FOFOA [5:49 P.M.]:
With $13 million, you could take possession of a basket of physical from GLD
at a good price.
Small Giant [5:49 P.M.]:
what is the minimum threshold?
FOFOA [5:50 P.M.]:
100,000 shares is a basket. Must be redeemed through an "Authorized
Small Giant [5:50 P.M.]:
wow this is getting very very interesting
FOFOA [5:50 P.M.]:
Authorized Participants are: BMO Capital Markets Corp., CIBC World Markets
Corp., Citigroup Global Markets Inc., Credit Suisse Securities (USA) LLC,
Deutsche Bank Securities Inc., EWT, LLC, Goldman, Sachs & Co., Goldman
Sachs Execution & Clearing, L.P., HSBC Securities (USA) Inc., J.P. Morgan
Securities Inc., Merrill Lynch Professional Clearing Corp., Morgan Stanley
& Co. Incorporated, Newedge USA LLC, RBC
Capital Markets Corporation, Scotia Capital (USA) Inc., and UBS Securities
Small Giant [5:51 P.M.]:
so how would that work?
Small Giant [5:51 P.M.]:
you buy 100K shares of GLD
Small Giant [5:51 P.M.]:
FOFOA [5:53 P.M.]:
You've got to go to one of those APs and have them
create a basket for you. That gold is then transferred from the GLD allocated
account into your broker's unallocated account. Then you redeem your basket
and have your broker allocate the gold to you.
Small Giant [5:54 P.M.]:
so it's really is that easy?
FOFOA [5:55 P.M.]:
I'm working on a post tentatively called "Who is Draining GLD"
using a lot of snips from the prospectus. The entire world of confused
financial analysts is misinterpreting the GLD inventory reduction as if it is
gold negative. But it is precisely the opposite. GLD doesn't buy gold when
it's going up and sell when it's going down. Doesn't
work that way. But that's what everyone thinks.
FOFOA [5:57 P.M.]:
GLD might be the last reservoir for the giants to drink from. That's my
Thought of the day. Because there should be easier ways to buy a tonne of gold.
Small Giant [5:58 P.M.]:
u lost me
Small Giant [5:59 P.M.]:
count me as a confused financial analyst
So after this chat I started thinking that I should write this post for other
"small giants" out there that might be looking for tonnes of physical at a good, off-market price.
Does anyone remember the Jim Rickards comment I
quoted in Open Letter to EMU Heads of State? Here it is:
"One point that does not get enough attention
is the impact of size in the physical market. It’s
one thing to say that COMEX is $1,100 per ounce and physical might be $1,200
per ounce for one metric tonne if you can find it.
But what about 100 tonnes? 500 tonnes?
Physical orders of that size are impossible to execute outside of official
channels. Size of order is relevant in any market but I have never seen a
market (short of a full blown manipulation or short squeeze) with as much
price inelasticity as physical gold which is why the buy side overhang keep their intentions to themselves."
Now you are probably thinking, "why bother with GLD where a minimum
"basket" is a whopping 100,000 shares (around 10,000 ounces) for
$13 million dollars when you can take delivery of as little as a 400 ounce
"LGD bar" from Eric Sprott's PHYS for
just over a half million dollars?" If you thought that, then you are not
thinking like a Giant. Read Jim Rickards' comment
again. Giants like to keep their intentions to themselves. Why? Because they
prefer to buy in off-market transactions – ones that do not influence
the price of gold – in order to maximize the number of ounces they
receive for their normally market-moving quantities of currency. They know
that the size they want to convert would move the price, and then they would
get less gold for their money.
Now let's compare PHYS with GLD and try to think like a real Giant for a
The one day drain from GLD just the other day was larger than the entire PHYS
ETF by more than 5 tonnes. So what would have
completely emptied the Sprott warehouse was only
2.48% of GLD. The amount drained from GLD since Dec. 21st was 268% of Eric Sprott's PHYS. And what has it caused but barely a blip
on the radar? Can you imagine the fuss (or price explosion!) if one single
billionaire decided to clean out PHYS? That's right. PHYS represents maybe
one real Giant. That's not exactly a "reservoir" for the giant
class to drink from.
If you are a Giant, or even a Small Giant, you should know about this
off-market opportunity to take giant amounts of physical into your possession
at a good price. And you should know this before it is all gone. As my Small
Giant friend wrote, "very very few people
realize that you can convert GLD shares to actual physical." He didn't
know until yesterday. But it's all there in the prospectus. It tells you how
to do it, and who to contact to get it done. If one of the Authorized Participants
refuses your business, just call the next one on the list. There are 16 of
I am reposting portions of the prospectus from the SPDR Gold Shares (GLD)
website right here. It may seem like a lot to read, but trust me, this is a highly abbreviated version of the 46 page
prospectus. This is actually from the reader-friendly "FAQ" section
of the website, although some of it comes directly from the prospectus. This
is all you really need to know!
8.Can you take physical possession of
The Trustee, Bank of New York, does not deal directly with the public. The
trust handles creation and redemption orders for the shares with Authorized
Participants, who deal in blocks of 100,000 shares. An individual investor
wishing to exchange shares for physical gold would have to come to the
appropriate arrangements with his or her broker.
is the gold price set?
The spot price for gold is determined by market forces in the 24-hour global
over-the-counter (OTC) market for gold. The OTC market accounts for most
global gold trading, and prices quoted reflect the information available to
the market at any given time. The spot price can be found on:
The London Bullion Market Association (LBMA) has about 70 full members, as
well as many associate members. Twice daily during London trading hours the
ten market making members of the LBMA fix a gold reference price for the
day’s trading. These prices are based upon the actual buy and sell
orders for gold in the global OTC market. A good analogy for the London fix
versus OTC trading would be to consider the London fixes similar to
opening/closing prices for stocks and to consider the spot price for gold as
the continuous market price throughout the trading day.
The COMEX division of the New York Mercantile Exchange (NYMEX) is a futures
and options exchange that acts as a marketplace to trade futures and options
contracts on metals, including gold. Gold futures contracts typically trade
at a premium to the spot price. Further discussion can be found in the
is the relationship between the GLD Net Asset Value, the GLD share price and
the gold spot price?
The investment objective of the Trust is for the value of the shares to
reflect the price of gold bullion, less the expenses of the Trust’s
The Net Asset Value (NAV) of the Trust is determined by the Trustee each day
that the NYSE Arca is open for regular trading. The
NAV of the Trust is calculated based on the total ounces of gold owned by the
Trust valued at the Gold London PM fix of that day plus any cash held by the
Trust less accrued expenses. The NAV of each GLD share is the NAV of the Trust
divided by the total number of shares outstanding.
The gold spot price is determined by market forces in the 24-hour global
over-the-counter market for gold and reflects the information available to
the market at any given time. The Indicative Intraday Value per GLD share
published on the www.spdrgoldshares.com website is based on the mid-point of
the bid/offer gold spot price adjusted for the Trust’s daily accrued
The NYSE Arca is an electronic exchange which
displays orders simultaneously to both buyer and seller. Once orders are
submitted, all trades are executed in the manner designated by the party
entering the national best bid or offer. The buy and sell offers are posted
on NYSE Arca in price order from best to worst and
if the prices match up, they are ordered based on the time the buy order or
sell order was posted (earliest to latest). These prices reflect the supply
and demand for shares which is influenced by factors including the gold spot
price and its impact on the NAV.
is gold transferred to or withdrawn from the Trust?
The Bank of New York Mellon, as trustee of the Trust, or the Trustee, and the
Custodian have entered into agreements which establish the Trust’s
unallocated account and the Trust’s allocated account. The
Trust’s unallocated account is principally used to facilitate the
transfer of gold between Authorized Participants and the Trust in connection
with the creation and redemption of Baskets (a “Basket” equals a
block of 100,000 SPDR® Gold Shares). The Trust’s Authorized
Participants are the only persons that may place orders to create and redeem
Baskets and, in connection with the creation of Baskets, are solely
responsible for the delivery of gold to the Trust. The Trust never purchases
gold in connection with the creation or redemption of Baskets or for any
other reason. All gold transferred in and out of, and held by, the Trust must
comply with the rules, regulations, practices and customs of the LBMA,
including “The Good Delivery Rules for Gold and Silver Bars.” The
specifications of a London Good Delivery Bar are discussed below. The
Trust’s unallocated account is also used to facilitate the monthly
sales of gold made by the Trustee to pay the Trust’s expenses.
Except when gold is transferred in and out of the Trust or when a small
amount of gold remains credited to the Trust’s unallocated account at
the end of a business day (which the Custodian is directed to limit to no
more than 430 ounces), the gold transferred to the Trust is held in the Trust’s
allocated account in bar form. When Baskets are created or redeemed, the
Custodian transfers gold in and out of the Trust through the unallocated
accounts it maintains for each Authorized Participant and the unallocated and
allocated gold accounts it maintains for the Trust. After gold has been first
credited to an Authorized Participant’s unallocated account in
connection with the creation of a Basket, the Custodian transfers the
credited amount from the Authorized Participant’s unallocated account
to the Trust’s unallocated account. The Custodian then allocates
specific bars of gold from unallocated bars which the Custodian holds, or
instructs a subcustodian to allocate specific bars
of gold from unallocated bars held by or for the subcustodian,
so that the total of the allocated gold bars represents the amount of gold
credited to the Trust’s unallocated account to the extent such amount
is representable by whole bars. The amount of gold represented by the
allocated gold bars is debited from the Trust’s unallocated account and
the allocated gold bars are credited to and held in the Trust’s
allocated account. The process of withdrawing gold from the Trust for a
redemption of a Basket follows the same general procedure as for transferring
gold to the Trust for a creation of a Basket, only in reverse.
The Custodian updates its records at the end of each business day (London
time) to identify the specific bars of gold allocated to the Trust and
provides the Trustee with regular reports detailing the gold transfers in and
out of the Trust’s unallocated account and the Trust’s allocated
account. The Trust’s website includes a list of the gold bars held in
the Trust’s allocated account. The list identifies each bar by bar
number, brand, weight, fineness and fine weight and is updated once a week.
are the Trust’s Authorized Participants and what is their function?
Authorized Participants are the only persons that may place orders to create
and redeem Baskets; the Trust does not deal directly with individual investors.
Authorized Participants must be (1) registered broker-dealers or other
securities market participants, such as banks and other financial
institutions, which are not required to register as broker-dealers to engage
in securities transactions and (2) Depository Trust Company (DTC)
participants. Each Authorized Participant must establish an unallocated
account with the Custodian in order to be able to process the gold transfers
associated with creating and redeeming Baskets. Authorized Participants can place
an order to create or redeem one or more Baskets on every day the NYSE Arca is open for trading. The Trust issues new Baskets to
Authorized Participants in exchange for their delivery of gold to the Trust
upon a creation and transfers gold to Authorized Participants in exchange for
their delivery of Baskets to the Trust upon a redemption. In creating or
redeeming Baskets, Authorized Participants may act for their own accounts or
as agents for broker-dealers, custodians and other securities market participants
that wish to create or redeem Baskets. An order for one or more Baskets may
be placed by an Authorized Participant on behalf of multiple clients. A list
of the Trust’s current Authorized Participants may be found in the
Annual Report or Prospectus of the Trust most recently filed with the
Securities and Exchange Commission.
is an unallocated account?
An unallocated account is an account with a bullion dealer, which may also be
a bank, to which a fine weight amount of gold is credited. Transfers to or
from an unallocated account are made by crediting or debiting the number of
ounces of gold being deposited or withdrawn. As gold held in an unallocated
account is not segregated from the bullion dealer’s assets, credits to
an unallocated account represent only the bullion dealer’s obligation
to deliver gold and do not constitute ownership of any specific bars of gold.
The account holder is entitled to direct the bullion dealer to deliver an
amount of physical gold equal to the amount of gold standing to the credit of
the account holder. When delivering gold, the bullion dealer allocates
physical gold from its general stock to the account holder with a
corresponding debit being made to the amount of gold credited to the
The Trust’s unallocated account is only used for the transfer of gold
to and from the Trust’s allocated account.
is an allocated account?
An allocated account is an account with a bullion dealer, which may also be a
bank, to which individually identified gold bars owned by the account holder
are credited. The gold bars in an allocated account are specific to that
account and are identified by a list which shows, for each gold bar, the
refiner, assay or fineness, serial number and gross and fine weight. The
account holder has full ownership of the gold bars.
The Trust’s allocated account is only used for holding the allocated
gold bars of the Trust.
the Trust’s gold ever traded, leased or loaned?
Gold held in the Trust’s allocated account in bar form or credited to
the Trust’s unallocated account is the property of the Trust and is not
traded, leased or loaned under any circumstances.
And from the latest 10K filed with the SEC, here is the list of the current
Authorized Participants [emphasis mine]:
Authorized Participants may act for their own
accounts or as agents for broker-dealers, custodians and other securities
market participants that wish to create or redeem Baskets. An order for one
or more Baskets may be placed by an Authorized Participant on behalf of
multiple clients. As of the date of this report:
BMO Capital Markets Corp.
CIBC World Markets Corp.
Citigroup Global Markets Inc.
Credit Suisse Securities (USA) LLC
Deutsche Bank Securities Inc.
Goldman, Sachs & Co.
Goldman Sachs Execution & Clearing, L.P.
HSBC Securities (USA) Inc.
J.P. Morgan Securities Inc.
Merrill Lynch Professional Clearing Corp.
Morgan Stanley & Co. Incorporated
Newedge USA LLC
RBC Capital Markets Corporation
Scotia Capital (USA) Inc.
UBS Securities LLC
…have each signed a Participant Agreement with the Trust and may create
and redeem Baskets as described above. Persons interested in purchasing
Baskets should contact the Sponsor or the Trustee to obtain the contact
information for the Authorized Participants. Shareholders who are not
Authorized Participants will only be able to redeem their Shares through an
So now I offer up a scenario, not as a statement of
fact, but as fodder for thought and discussion. In this scenario I am not
assuming that the drain on GLD to date has been the direct redemption of ETF
shares by Giants. I presume it is simply redemptions by Bullion Banks in
order to meet the delivery demands of "important clients," real
Giants, perhaps from Asia and the Middle East. And because the BBs would
normally have better options than plundering GLD, I am assuming those options
are either gone or far more problematic than legalized looting.
Also, following Lance Lewis' "puke indicator," one could be
forgiven for suspecting that the Bullion Banks have some way to temporarily
"pound" the price of gold down on the COMEX in order to buy back
ETF shares during a "good price window" with the intention of
redeeming those shares into deliverable gold for clients that purchased it at
a higher price. Perhaps it would take, what, a month or so to churn such a
profit from a Giant delivery? Reminds me of that fella Jim Rickards spoke of on King World News:
- Swiss Bank Client Denied His $40 Million in Gold
Jim: “Correct and upon request to move the gold...the bank demurred,
the bank said, ‘Well, no, not so fast’ and he said, ‘What
do you mean?’ Anyway, long story short I could see that taking a day or
two...This took thirty days to complete delivery. Now if the gold is sitting
there it shouldn’t take thirty days. Oh, and by the way I should add
that the individual had to threaten to go public, in effect say I’ll
call Reuters or I’ll call King World News or I’ll call Dow Jones
and let them know that you don’t have the gold, you’re not good
Eric: "And he had his lawyers get involved?"
Jim: “Correct, and through all of that eventually the individual did
get his gold, but this is something that should have taken two days, three
days, a week at the most, although I would say even a week is a long time.
But it took thirty days, and it took lawyers, it took threats of publicity,
it took a lot of pressure to do that, which my inference is that that gold
was not there. The bank had to scramble, go out and find it somewhere before
they could make good delivery.”
I wonder when that was. And I wonder if GLD "puked" any
"baskets" around that time.
Someone is draining GLD of its gold. Someone is taking in millions of ounces
and tonnes of physical gold at off-market prices
while the paper bug cheerleaders call it "dumping" or
"offloading" the gold. Again, one man's "outflow" is
another man's pickup truck (or dump truck as the case may be) backed right up
to the loading dock at the GLD depository.
As of 2008, some analysts estimated there were still 15,000 tonnes of unallocated (un-spoken-for) gold floating
around the Bullion Banking system. Of course some of that is still there,
along with a decreasing supply from the mines and a scrap supply that, after
rising since 2006, appears to have plateaued in 2010. You can continue to go
after that diminishing flow "on market" by playing the paper game
like Dan Shak. But one day soon, it will all be spoken for. And you don't want to
be left holding only paper on that day. And if the BBs are raiding GLD like
it seems, that 15,000 tonnes may be closer to 1,200
tonnes than you or I would be comfortable knowing
Jim Rickards wrote about 100 tonne
and 500 tonne lots being impossible to come by
"outside of official channels" meaning off-market prices. But from
what I can tell, there are still twelve 100 tonne
lots or two 500 tonne lots available through one of
the 16 dealers listed above. The instructions are all there. This isn't like
the private sector trying to buy gold from the public sector, like Sprott being turned down by the IMF. This is the reverse! Go for it, I say. Why not?
And for those of you GLD fans that think you will simply hold onto your
shares until the bitter end, I have a warning for you. These Giants don't
need to over-bid your shares away from you. They can always buy them at the
price of paper gold trading in London and New York. And there will come a point
when you are watching the premium on physical coins jump from 5% over GLD to
50% on its way to 500% over the paper gold price. How long are you going to
stubbornly hold onto your precious paper before you finally relinquish it to
that last Giant's delivery "basket?" Remember, unless you've got
$13 million, you've only got paper.
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