I’ve long had a feeling that these places where people invest in gold don’t have nearly as much gold as they’re selling. They turn around and invest your money in stocks, just promise to give it back to you based on the price in gold. They just hope there isn’t a run to expose them.
GLD is the huge gold ETF. If you want to make a straight bet on the gold bullion price going up you can buy a share at $136. Are they buying and selling gold bullion each day to keep their books in line with customers buying and selling shared in GLD?
Not completely so. GLD does own/buy/sell gold bullion but they are also always screwing around with gold futures and gold derivatives to keep their "gold ownership" in line with how many shares in GLD are bought/sold each day.
You can short GLD if you say gold price is going down plus the options market in GLD is liquid
There are gold funds that do invest in straight physical gold with no monkey business. Sprott is one. So is Central gold fund and Perth Mint (Australia)