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Old 03-04-2016, 10:27 AM   #1
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BlackRock's Gold ETF (IAU) suspends new share issuance

Quote :
BlackRock's Gold ETF (IAU) has seen fund inflows every day in 2016 (no outflows at all) and with the stock trading above its NAV for most of the year, the world's largest asset manager has made a significant decision:
  • BLACKROCK SAYS ISSUANCE OF GOLD TRUST SHARES SUSPENDED
  • BLACKROCK SAYS SUSPENSION DUE TO DEMAND FOR GOLD
...
Quote :
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iShares Delaware Trust Sponsor LLC, in its capacity as the sponsor of iShares Gold Trust (IAU), has temporarily suspended the creation of new shares of IAU until additional shares are registered with the Securities and Exchange Commission (SEC).
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IAU holds gold as a physical asset. IAU is an exchange-traded commodity (ETC), which therefore is not eligible for registration as an investment company under the ’40 Act. IAU may only be registered under the ’33 Act as a grantor trust. Under the ’33 Act, subscriptions for new shares in excess of those registered requires additional filings with the SEC.
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Since the start of 2016, in response to global macroeconomic conditions, demand for gold and for IAU has surged among global investors. IAU has $8 billion in assets under management, and has expanded $1.4 billion year to date. February marked its largest creation activity in the last decade.

This surge in demand has led to the temporary exhaustion of IAU shares currently registered under the ’33 Act. We are registering new shares to accommodate future creations in the primary market by filing a Form 8-K to announce the resumption of the offering of new shares. The ability of authorized participants to redeem shares of IAU is not affected.
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More: http://www.zerohedge.com/news/2016-0...ue-demand-gold

If I'm reading that right, they have to acquire and hold a certain amount of physical gold to back the shares of IAU that they issue. Record demand has caused them to exhaust the number of shares that they can create per their existing SEC filing. In order to issue more shares, they need to update their filing with the SEC.

ZH implies that this is indicative of a supply issue with physical gold, but I'm not seeing that. If anything, it just means that Blackrock won't be buying physical gold to match new share issuance until the updated SEC filing is complete.
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Old 03-04-2016, 04:14 PM   #2
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Blackrock do seem to recognise demand for gold though ......
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