james turk questions how the gold etf could purchase 150 tons of gold without much effect on the gold price. when it comes to etf's, remember the old saying:

"those are buying and selling sardines, not eating sardines."

How can a 150-tonne increase in demand for metal in recent weeks translate into such a relatively small increase in the price of gold? This disparity raises more questions as to whether the ETF really owns the metal supposed to be backing the shares it issues.

I'm no fan of the precious metal ETFs, and haven't been since they were first launched. I've written extensively about the ETFs to record the risks as I see them. These writings can be found at the following links.
http://www.financialsense.com/editor...
http://www.financialsense.com/editor...

In short, the ETF is at best a trading vehicle, and not an alternative to owning physical gold. In this sense, the ETF is like a futures contract, which of course is not an alternative to owning physical gold either. With these trading vehicles you have exposure to movements in the price of gold, but they also come with counterparty risk, which should of course be avoided because of the ongoing economic and financial problems around the globe. The lessons in this regard were learned in September when Lehman collapsed and AIG was on the ropes, which caused numerous commodity ETFs in London to suspend trading.

So if you want to trade the price of gold, trade futures or ETFs. But do not view futures or the ETFs as an alternative to owning physical gold and silver.

If you are still not convinced, or even if you are, I recommend reading an article by Jim Sinclair which questions the integrity of GLD and the other gold ETFs. His February 12th report entitled "Where Do All The Gold ETFs Get Their Bullion From?" can be read at the following link:
http://jsmineset.com/index.php/2009/...

http://goldmoney.com/en/commentary/2...