This seems just like the Goldman website disclaimer about trading against you if you ran your trades through their system…buyers of gold ETF‘s need to understand the fine print and know whether they are actually buying gold or just a piece of paper that isn’t actually backed by physical. The ETF could be just a promise to exchange paper for gold; and we all know how well that worked out back in 1971.
The IAU prospectus on the front page says “The assets of the trust consist primarily of gold held by the custodian on behalf of the trust”…the ZH point was the phrase “primarily of gold”. The insinuation is that the word “primarily” is legal weaselese that probably means one share of this could be backed partially by gold, and partially by something else. All I’m saying is that there’s risk there other than changes in the price of gold that is likely frequently glossed over.
My point: you buy a gold etf, maybe you get used cars when you cash in the shares.