Gold inventories in trusts and funds declined. Silver inventories did not.
Even as the prices of both declined.
The largest gold trust is GLD.
Gold is held by HSBC Bank plc (the “Custodian”) in their London vaults on behalf of the GLD Trust. And temporarily in unallocated accounts managed by subcustodians and bullion banks.
The Bank of New York Mellon, as trustee of the Trust, or the Trustee, and the Custodian have entered into agreements which establish the Trust’s unallocated account and the Trust’s allocated account, which are described in more detail in FAQs 18 and 19. The Trust’s unallocated account is principally used to facilitate the transfer of gold between Authorized Participants and the Trust in connection with the creation and redemption of Baskets (a “Basket is 100,000 shares of the Trust”). The Trust’s unallocated account is also used to facilitate the transfer of gold from the Trust for the payment of the Trust’s monthly expenses. The Trust’s Authorized Participants are the only persons that may place orders to create and redeem Baskets and, in connection with the creation of Baskets, are solely responsible for the purchase and delivery of London Good Delivery Gold Bars.
An unallocated account is an account with a bullion dealer to which a fine weight amount of gold is credited. The bullion dealer may also be a bank. Transfers to an unallocated account are made by crediting the number of ounces of gold being deposited to the account and transfers from an unallocated account are made by debiting the number of ounces being withdrawn from the account. Gold held in an unallocated account is not segregated from the bullion dealer’s assets. Thus, credits to an unallocated account represent only the bullion dealer’s obligation to deliver gold and do not constitute ownership of any specific bars of gold.”
Only authorized participants can add or redeem from inventories by creating or redeeming baskets of unit shares.
As of the latest quarterly report for GLD, Credit Suisse, Goldman, Sachs & Co., HSBC Securities, J.P. Morgan Securities, Merrill Lynch, Morgan Stanley, RBC Capital Markets, Scotia Capital, UBS Securities, and Virtu Financial BD LLC are the only Authorized Participants.