Gyroscopic Investing

iShares announced today it has suspended creations in the iShares Gold Trust because strong demand in the fund had led to "temporary exhaustion of IAU shares."

http://www.etf.com/sections/features-an ... -suspended

Morningstar gives real time premium/discount on their site and a short time ago IAU was trading at a 1% premium, while GLD was trading at a slight discount.

http://www.morningstar.com/etfs/arcx/iau/quote.html

http://www.morningstar.com/etfs/arcx/gld/quote.html

Phew, new shares suspended. I guess that's a good or neutral thing.
At first, I just saw the "suspended" and got nervous.

For the most part, IAU will continue to trade as normal on stock exchanges. However, with the creation process temporarily suspended, there is the possibility it could develop a premium to its net asset value--something investors should keep an eye on.

dualstow wrote: Phew, new shares suspended. I guess that's a good or neutral thing.
At first, I just saw the "suspended" and got nervous.

Sorry, I've modified the subject to improve accuracy and reduce risk of heart attack!

Hah, not your fault. I blame Sumit Roy. 
I appreciate your posting this news!

Too much demand and not enough supply is never a bad thing if you're already an owner.

Does this mean we should all sell IAU and buy (at least temporarily) GLD?

Wall St Journal says

BlackRock wasn’t able to issue new shares to meet the demand because it failed to file the appropriate Securities and Exchange Commission paperwork, the firm said.

The breakdown could prevent the fund from accurately reflecting the value of gold, interrupting a key process that lets investors arbitrage any difference between the quoted price of the ETF and the value of the underlying assets.

Edit: sorry, this is the proper link: http://www.wsj.com/articles/blackrock-s ... 1457107864

Below is the link I originally erroneously added. It's about Mark Cuban buying call options on GLD.
http://www.wsj.com/articles/a-big-bet-o ... 1456396207

Xan wrote: Does this mean we should all sell IAU and buy (at least temporarily) GLD?

You could do that provided you can actually sell your IAU shares. You might find that hard going now that the word is out. I actually discovered this pricing discrepancy because I was implementing a DCA purchase into IAU and I noticed that trading in IAU was very thin - several minutes between trades and only small blocks. That made me suspicious so I checked GLD, which was trading quite briskly. That's when I discovered the premium to NAV in IAU. So while there were some IAU buyers, I guess they were small retail buyers unaware of the pricing discrepancy (while savvy sellers were lined up on the SELL side).

I used to religiously check price vs. NAV when I bought or sold and ETF, but lately got sloppy and was skipping that. Lucky I noticed the strange trading activity this time. I ended up with GLD at a .2% discount instead of IAU at a 1% premium. From now I one I will be routinely checking NAV before any ETF trade!

Is this anything to be concerned about? What about for GLD and PHYS holders?

Reub wrote: Is this anything to be concerned about? What about for GLD and PHYS holders?

The article I linked to at the top of this thread fully answers the question of whether it is a problem or not, specifically with respect to IAU and GLD. Read the article, it's short and concise!

As for PHYS, it's an apples and oranges comparison. PHYS is not an ETF, and is constructed so that purchasers always pay a premium for their gold exposure.

PHYS: Not A Gold ETF, And A BAD Deal
http://www.etf.com/sections/blog/7345-p ... nopaging=1

Drewskers wrote: PHYS: Not A Gold ETF, And A BAD Deal
http://www.etf.com/sections/blog/7345-p ... nopaging=1

Damn. Maybe I'll unload my PHYS (formerly GTU) if it ever hits breakeven.

Share Creation For Gold Fund IAU Restored
http://www.etf.com/sections/features-an ... -suspended

Here is a detailed explanation of what happened. Bottom line: this was a paperwork issue, not a shortage of gold issue.

Gold Fund’s Much Ado About Nothing
http://www.etf.com/sections/blog/gold-f ... ut-nothing

(Edit: I think that second article is essentially same article as Desert posted earlier today).

Yep.

Drewskers wrote:

Reub wrote: Is this anything to be concerned about? What about for GLD and PHYS holders?

The article I linked to at the top of this thread fully answers the question of whether it is a problem or not, specifically with respect to IAU and GLD. Read the article, it's short and concise!

As for PHYS, it's an apples and oranges comparison. PHYS is not an ETF, and is constructed so that purchasers always pay a premium for their gold exposure.

PHYS: Not A Gold ETF, And A BAD Deal
http://www.etf.com/sections/blog/7345-p ... nopaging=1

Yes, but you get the 15% tax treatment with PHYS.  Regardless of what this article says about it, the S1/prospectus has been reviewed by attorneys and the SEC and states 15%.  I own PHYS and will be filing 15% when I sell.

azmat9 wrote: http://seekingalpha.com/article/3956702 ... tal-demand

Well there's a boatload of misinformation.