The point here is that he thinks (among other things) that the gold ETF might not actually be holding any gold at all.
“The point here is that he thinks (among other things) that the gold ETF might not actually be holding any gold at all.”
+++++++++++
There is about one of these a week posted at Seeking Alpha. they really know very little about it.
He starts out saying that the documents have Lawyer Talk in them. Would you want them written by first graders? Who does he believe should have written the trust agreements?
Then he complains that the price of GLD does not now track physical gold exactly. It cannot. They have charged small fees for the several years since it was started. Gold generates no revenues to pay those fees so the asset must be “clipped” a bit every year to cover that cost.
It is not like a Madoff deal or hedge fund deal promising high returns, or any return at all actually. They don’t promise to make your gold multiply with interest. They just promise to hold it, for a fee, in the same way the cleaners store your winter clothes during the summer. They both make money doing that.
Then the guy recommends CEF. That is a closed end fund selling today at a premium of about 11%. You get 11% less asset than you pay for, instantly. CEF also charges a management fee.