Mining’s old guard needs strong medicine
A new report details subpar investor returns in the mining industry over the last decade, particularly big cap diversified companies which have not adapted to new realities.
While investors are pulling some of their investment out of physically gold-backed exchange traded funds, appetite for silver ETFs are hitting new highs.
SPDR Gold Shares (NYSEARCA: GLD) holdings, which account for more 45% of the global total, have seen inflows in 2016 of nearly 307 tonnes, but after peaking early July, 33.6 tonnes have been pulled out from the fund’s vaults since then, reducing the value of holdings by nearly $2.5 billion.
In contrast silver ETFs, just over the past month, have recorded over 9 million ounces or 280 tonnes of net inflows, bringing the total additions since the start of the year to a record 67 million ounces or 2,084 tonnes. Silver in ETF vaults have now grown to more than 21,000 tonnes or around 675 million ounces.
December gold on Friday in New York remained rangebound in lacklustre trading exchanging hands for $1,330 an ounce, holding onto gains of more than 25% or $270 an ounce this year. Gold’s high for the year came in July when the metal stopped just short of $1,380 an ounce.
Silver futures enjoyed better fortunes, jumping 2.7% to $19.70 an ounce during early trading adding to the more than 40% surge in price so far in 2016. The silver price also topped out in July at $21.25 an ounce.
Source: Capital Economics
Comments
Steve
“SPDR Gold Shares (NYSEARCA: GLD) holdings, which account for more 45% of the global total, have seen inflows in 2016 of nearly 307 tonnes, but after peaking early July, 33.6 tonnes have been pulled out from the fund’s vaults since then, reducing the value of holdings by nearly $2.5 billion.”
Frik Els, I’ve seen you make these claims a number of times now but you have yet to provide any substantial evidence to support these claims. How reliable are GLD’s holding reports? GLD does not give retail investors the right to redeem for any of its mystery physical gold holdings. This fact alone ensures the GLD shares to be nothing more than paper at the end of the day. GLD also has a glaring audit loophole in their prospectus that states they have no right to audit subcustodial gold holdings. To this day, I have not heard of a single good reason for the existence of this backdoor to the fund. Some other red flags I’ve stumbled upon, verified and welcome everyone else to verify for themselves:
“Did anyone try calling the GLD hotline at (866) 320 4053 in search of numerical details on GLD’s insurance? The prospectus vaguely states “The Custodian maintains insurance with regard to its business on such terms and conditions as it considers appropriate which does not cover the full amount of gold held in custody.” When I asked about how much of the gold was insured, the representative proceeded to act as if he didn’t know and said they were just the “marketing agent” for GLD. What kind of marketing agent would not know such basic information about a product they are marketing? It seems like they are deliberately hiding information from investors.
I remember there was a highly publicized visit by CNBC’s Bob Pisani to GLD’s gold vault. This visit was organized by GLD’s management to prove the existence of GLD’s gold but the gold bar held up by Mr. Pisani had the serial number ZJ6752 which did not appear on the most recent bar list at that time. It was later discovered that this “GLD” bar was actually owned by ETF Securities.”