SP:"Did you note what Greg Canavan said about how gold being...

SP:"Did you note what Greg Canavan said about how gold being held by the GLD ETF is being used? "

Yes, I noted it and even understood it.

The banks are "redeeming baskets of shares".

Do you get what has happened??

The bullion banks bought shares in the GLD ETF, the GLD ETF bought gold to cover those shares, and now the banks are converting their shares to the actual gold that GLD bought.

GLD profits both ways from this - when people buy gold from them (the spread), while people own shares (take out fees from the share price) and then if you convert shares to gold (all sorts of fees to do this).



Simple. If the ETF was a scam, the banks would not be able to exchange their shares for gold, 'cos there wouldn't be any gold.


In the gold ETF that's listed in Australia, from memory individuals can do the same thing - convert their shares to gold. But it is costly and pretty much defeats the purpose of an ETF.