So after reading this piece. It seems that buying shares in popular gold ETF's like GLD or IAU isn't really backed by Gold at all its just ETF shares themselves.. the article below explains this in detail.
I suspect most of us here buy gold as a hedge against a down stock market or economy. But if the ETf's are truly paper, then there's a good chance that during a severe economic event, the counter-parties (HSBC GLD ETF ) may not be able to honor the obligation, which I take to mean if if the midst of crash you need to sell they wouldn't be able to honor it if they are in economic difficulty. Is this true are there any regulatory safeguards that would prevent this?
Submitted January 26, 2020 at 10:33PM by abrandis https://ift.tt/3aJLBkZ
