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Strategies & Market Trends : 2026 TeoTwawKi ... 2032 Darkest Interregnum
GLD 368.29+0.6%Nov 7 4:00 PM EST
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To: carranza2 who wrote (61363)2/19/2010 4:57:55 PM
From: RJA_2 Recommendations  Read Replies (1) of 217576
 
Last time I looked at the prospectus for GLD, it seems that the mechanism for pricing depends on purchases and sales by "Authorized Participants", buying baskets of appx 100k ounces or more (its been a while since I looked at this so I may not have the details right here)... but the mechanism does not seem to be automatic.

Typically GLD and SLV trade at discounts to net asset value, where usually GTU and central fund of canada trade at premiums to same. Both of the later are closed end funds and therefore their shares may available only from the market, not from the fund at any given time.

For details of the mechanism of pricing of GLD, see the prospectus.

They also explicitly make no guarantee that the price of GLD will follow the price of gold.

There has been alot of discussion as to whether or if GLD has all the asset it says it does... IMHO it does, based on audits by a third party inventory company, Inspectorate (I seem to recall) who has set up shop in their vault on a monthly basis.

However, what is not so much discussed is the country risk, and the history of confiscation of assets by Great Britain in periods of national emergency, such as the first world war.
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