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<p>[QUOTE=&quot;desertgem, post: 1316379, member: 15199&quot;]The way that the ETF&#039;s trust such as GLD or SLV is written doesn&#039;t require immediate sell off of stored gold like with common mutual funds does with stocks. Since only certain participants ( not us type of investors, read JPM, etc. ) can actually move gold in or out, except under large quantity exchanges, the settlement is cash. The ETF issues a number of shares depending on their stored gold or silver. Once the shares are issued, the buying and selling ( thus the profits and losses) are borne by the individual investors owning the shares. Yes, any issued stock can go&nbsp; up or down, but the SLV and GLD ETF doesn&#039;t have to take part unless they wish to buy back some stock at a low price ( smart, as it permits them to have a surplus of gold backing the remainder), or if they can purchase physical gold at a lower price due to the drop, they can later issue more stock, and make their own income. The options on ETFs are like options on regular stocks. No precious metal exchanges hands, and the options values are determined by the exchanges &quot;free market&quot;.</p><p><br /></p><p>When a person buys stock such as GE or GLD, they do not buy it from the company, they buy it from a seller, maybe like us or maybe a hedge fund, etc. But GE&nbsp; or GLD itself doesn&#039;t have to supply&nbsp; money or gold as the stock price rises or falls. When we sell, the company doesn&#039;t have to buy it back for a price, a buyer such as me, or a hedge fund has to supply the cash, so the amount of gold in GLD&#039;s trust and the number of Jet turbines at GE aren&#039;t varied until they decide to issue more stock, or buy back some stock taking it off of the market.</p><p><br /></p><p>yes, there may be a panic sell of of GLD stock on the market, but that doesn&#039;t change the amount of gold held. That is a time when the principal backers of GLD would be buying so they can keep the gold they have at lower value. If one really believes in gold, this would be the time of a life to buy. But as others say, it is only paper <img src="styles/default/xenforo/clear.png" class="mceSmilieSprite mceSmilie1" alt=":)" unselectable="on" unselectable="on" /></p><p><br /></p><p>jim[/QUOTE]</p><p><br /></p>

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