Loading ...Amid Gold Market Turmoil, HSBC Taps Bank Of England For GLD Bars
Why is all of this important to the SPDR Gold Trust? Because, Bank of England vault gold held by commercial banks ultimately comes from central banks through gold lending or is for delivery back to central banks. Which means that when GLD holds 400 oz gold bars at the Bank of England with Bank of England as subcustodian, it is holding gold bars that either came from gold lending transactions or are ultimately going back to the lending central banks.
If the SPDR Gold Trust is now holding leased central bank gold as part of its gold holdings, this raises the issue of double counting, a situation in which the same gold bars are claimed by two distinct parties, the central bank which lent the gold and still accounts for it on its balance sheet, and an exchange traded gold-backed ETF (GLD) which thinks that it has title to those same gold bars since they were ‘allocated’ to GLD at the Bank of England.
https://www.zerohedge.com/markets/amid-gold-market-turmoil-hsbc-taps-bank-england-gld-bars