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Ronan Manly: GLD keeps cadging central bank gold from the Bank of England
11:51p ET Friday, August 14, 2020
Dear Friend of GATA and Gold:
Bullion Star gold researcher Ronan Manly reports today that the biggest gold exchange-traded fund, the SPDR Gold Trust -- known by its stock symbol, GLD, and sponsored by the World Gold Council -- now has claimed for a second quarter to be holding gold at the Bank of England, and more metal in the second quarter than in the first.
GLD's transactions with the Bank of England, Manly writes, are disclosed by the fund's filings with the U.S. Securities and Exchange Commission.
Manly notes that it is highly unusual for the Bank of England to be acting as a subcustodian for GLD, whose gold ordinarily is supposed to be held by the fund's primary custodian, bullion bank HSBC, in HSBC's own vault.
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GLD's rules, Manly notes, say gold held for the fund by a subcustodian is to be "promptly" transferred to the custodian's vault. But even if such transfers were made with the gold held for the fund at the Bank of England in the first quarter, and the fund's gold held at the Bank of England in the second quarter was different gold, it would seem that GLD is having trouble obtaining metal. It also would seem as if GLD is deceptively squaring its books for public appearances by borrowing central bank gold, which most gold vaulted at the Bank of England is.
Manly estimates that the gold GLD has claimed from the Bank of England's vault so far this year amounts to between 70 and 150 tonnes.
Such sneaky maneuvering by GLD would fit with recent reports from metals trader Andrew Maguire that the London gold market is impossibly tight and from GATA consultant Robert Lambourne's monthly reports about the increasing use of gold swaps and derivatives by the Bank for International Settlements, a gold broker for central banks and bullion banks.
Suspicion might be dispelled here if the GLD's sponsor, the World Gold Council, would answer questions about what's going on. But, not so surprisingly, Manly writes that the council won't say a word. The council is not on the side of gold producers and investors but the side of central banks and their bullion bank agents.
Does GLD really own and hold the gold it claims to have? Why should any investor want to risk finding out, especially when the ETF's own sponsor won't answer for it?
Somebody should try to convey this information to billionaire Ray Dalio, boss of the Brigdewater Associates hedge fund in Connecticut, who purports to be a gold advocate but whose fund puts its gold money mainly in GLD. GATA has tried to contact Dalio many times in many ways in the last couple of years but he refuses to acknowledge us, even as it is likely that his gold money is actually being used for gold price suppression. But maybe that's how Dalio really wants it.
Manly's report is headlined "GLD Continues to Source Gold at the Bank of England, and at an Escalating Rate" and it's posted at Bullion Star here:
CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.
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