There have been some strange goings on in the world of ETF gold bar holdings of late.
Gold bug extraordinaire Professor Antal Fekete shines a light on the case of the SPDR GLD specifically –the largest of the gold-backed ETF funds in the US in terms of money managed. In a report published about two weeks ago Fekete notes the fund’s listed bars shrank rather mysteriously as of October 2.
As he explained:
Another story is about GLD, a leading gold ETF, which publishes its bar-list every Friday at the close of business, reporting the serial number of every bar in inventory. The list is customarily well over a thousand pages long. But, lo and behold, on Friday, October 2, and on Friday, October 9, the bar-list shrank to a mere couple hundred pages, with no explanation offered.
The equally gold-buggy Rob Kirby writing in Market Oracle blog, meanwhile, offered a little more detail on the actual discrepancies:
# on Friday, Sept. 25 — the list was 1,381 pages long
# on Friday, Oct. 2 — the list was 208 pages long
# on Friday, Oct. 9 — the list was 195 pages long
# then, on Wednesday, Oct. 14 — after questions were being raised about the strange machinations with the bar list in chat rooms on the internet — the list was back up to 855 pages long.
The latest October 23 list, though appeared to return to more normal proportions running at some 1291 pages.
So what gives? To be honest, we’re not really sure.
To shed some light, we tried contacting GLD’s marketing agent State Street Global Markets, but haven’t as yet had a definitive reply.
While we wait for one, however, we shall point out that on October 16 the CME exchange group announced that from October 19 it would allow gold to be used as collateral on margin accounts in all its markets as an alternative to debt or equities. According to the CME the move came “in response to customers’ wish to use their gold holdings more efficiently.”
The CME also said that on an initial basis it would use JP Morgan Chase as the only custodian for gold deposited as collateral with the exchange, making the bank one of the key beneficiaries — especially in the event it happened to be in any way short of allocated gold.
JP Morgan, by the way, happens to be a GLD authorised participant, as well as the second largest holder of GLD shares according to SEC filings as monitored by Bloomberg: