US fund buys gold for 31 billion dollars?

Gold for 31 billion dollars?

Spectacular gold purchase in the USA – and nobody seems to notice? According to a recent mandatory portfolio publication, a large private US asset manager has bought gold worth the alleged equivalent of 31 billion US dollars. Strictly speaking, it is only a gold derivative (“paper gold”). However, the investment would be an impressive statement. Here are the details:

 

Evoke Wealth Llc.

It concerns Evoke Wealth Llc. (in German: “Schaffe Reichtum”). At the end of September 2019, the company had an investment portfolio with a total value of USD 895 billion. And in the third quarter, according to the latest SEC (13F-Report) data, the capital manager acquired SPDR Gold Trust (GLD) for 31.22 billion US dollars. That would actually be equivalent to 224,862,000 shares. In the original SEC report, however, only 224,862 shares are listed, but also a value of USD 31 billion. The figures should therefore be treated with caution.

 

700 tons of “paper gold”?

A purchase of this magnitude would correspond to an investment of 699.39 tons of gold. Each GLD share is officially deposited with 1/10 ounce gold.

 

Enormous gold potential

Assuming 31 billion dollars and looking at the implied gold share of this money manager’s entire portfolio, 3.5 percent sounds ridiculous and yet plausible. In any case, such a gold purchase makes it clear in which regions the demand for gold can rise, if such gigantic asset managers once shift capital into precious metals. The inflows into gold ETFs already had a significant impact on the gold market during the gold rally until 2011.

 

Biggest GLD investor

At the same time, Evoke Wealth’s conditional investment was by far the largest shareholder of the SPDR Gold Trust. Among the major US banks, Morgan Stanley was the largest GLD investor at the end of September with 10.8 million GLD shares worth USD 1.5 billion. After all, the US investment bank almost doubled its position compared with the previous quarter (+91 per cent).