KWN [rumor]: GLD refuses to deliver gold

...
The mechanism of the way the ETF works means that unless you own it in significant quantities, you don’t have anything like a claim on the real underlying asset. And there are even stories about plenty of people who have actually tried to take significant amounts of ETF shares and exchange them for the physical metal, and been told that they can’t have it (the gold).
...
Eric King: “What you just said, Grant, is astonishing because the GLD ETF is set up so that you can exchange shares for (physical) gold, and you are saying that people (or entities) have been turned down.”

Williams: “Yes ... The minimum basket of shares you need now is roughly $14 million worth, and I’ve certainly heard stories of people who have taken that kind of size redemption requests to the custodians and been told that they can’t have the gold.”

Click to expand...

Eric King: “John, I know you have seen today’s interview with Grant Williams, but I don’t think people around the world understand what’s happening with GLD. People have tried to get their gold out of that ETF and you just can’t get it.”

Hathaway: “That’s right. If you are, say, Goldman Sachs or JP Morgan, or one of the big bullion dealers, you can exchange shares for gold. And it’s just an arbitrage game for the dealers.

But if you are not within that system, and you have 100,000 shares of GLD, it’s like pulling teeth trying to get physical gold out of that ETF....

Click to expand...