All reliance is placed on the chain of custody, not on the hallmark of the GLD originator. If the chain of custody is such that the present custodian is a GLD authorized depository that certifies in the present instant and circumstances with responsibility to its full faith and credit that the gold is at present GLD, then the gold remains GLD. In any other circumstance the gold is no longer GLD.
GLD gold is gold that the Buyer has an affirmative warranty from the immediately preceding GLD authorized depository. If, in the very rare circumstance that the GLD certified gold turns out to be adulterated, then the present owner is compensated to the full faith and credit of the immediately previous GLD certifying custodian. That custodian may have a reversionary claim against prior GLD custodians IF the last certifying custodian can prove that the adulteration occurred while in a specific prior GLD custodian’s possession. In all cases the Buyer looks to the GLD certifying entity for protection, not to the gold itself, or to the party whose hallmark appears.
Hallmarks can be easily forged. Gold can be adulterated after being hallmarked. The GLD certifying entity’s full faith and credit responsibility is the source of reliance, not the hallmark.
All non-GLD gold is “said-to-be-gold”, hallmarks notwithstanding. All non-GLD gold must be re-refined to prove the metal. The bullion banks buy only proven gold, either proven by re-refining and assay, or by the full faith and credit of the immediately precedent GLD authorized certifier.
Failure to Recognize Market Realities—Buyers
At the levels of offers we see, only banks or governments are Buyers. There are many more Sellers than bank or government Buyers. Banks and government Buyers can buy at any time in any amount. A purchase by them is merely a reclassification on their balance sheet from “Currency on hand” to “Gold on hand.” They are not motivated to purchase. They are not motivated to sell. Banks rarely buy or sale on their own volition. What banks do is make a market. They stand ready to buy or sell as their customers may wish. They will do so for properly validated customers, requesting to transact in legally owned clear title gold, taxes paid, all in accordance with bank policy, law and regulation, if the transaction brings an adequate profit to the bank. Otherwise, no deal.
All reliance is placed on the chain of custody, not on the hallmark of the GLD originator. If the chain of custody is such that the present custodian is a GLD authorized depository that certifies in the present instant and circumstances with responsibility to its full faith and credit that the gold is at present GLD, then the gold remains GLD. In any other circumstance the gold is no longer GLD.GLD gold is gold that the Buyer has an affirmative warranty from the immediately preceding GLD authorized depository. If, in the very rare circumstance that the GLD certified gold turns out to be adulterated, then the present owner is compensated to the full faith and credit of the immediately previous GLD certifying custodian. That custodian may have a reversionary claim against prior GLD custodians IF the last certifying custodian can prove that the adulteration occurred while in a specific prior GLD custodian’s possession. In all cases the Buyer looks to the GLD certifying entity for protection, not to the gold itself, or to the party whose hallmark appears.Hallmarks can be easily forged. Gold can be adulterated after being hallmarked. The GLD certifying entity’s full faith and credit responsibility is the source of reliance, not the hallmark.All non-GLD gold is “said-to-be-gold”, hallmarks notwithstanding. All non-GLD gold must be re-refined to prove the metal. The bullion banks buy only proven gold, either proven by re-refining and assay, or by the full faith and credit of the immediately precedent GLD authorized certifier.Failure to Recognize Market Realities—BuyersAt the levels of offers we see, only banks or governments are Buyers. There are many more Sellers than bank or government Buyers. Banks and government Buyers can buy at any time in any amount. A purchase by them is merely a reclassification on their balance sheet from “Currency on hand” to “Gold on hand.” They are not motivated to purchase. They are not motivated to sell. Banks rarely buy or sale on their own volition. What banks do is make a market. They stand ready to buy or sell as their customers may wish. They will do so for properly validated customers, requesting to transact in legally owned clear title gold, taxes paid, all in accordance with bank policy, law and regulation, if the transaction brings an adequate profit to the bank. Otherwise, no deal.
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