China Gold Fraud - How safe are the Gold ETFs?

After reading this report about China’s biggest Gold fraud which says 4% of the Gold reserves may be fake, I am wondering how safe is Gold underneath these Gold ETFs, Gold Mutual Funds, and Digital Gold sold by every other Payment wallets?

@nithin Maybe a detailed post on Z-connect on this?


After pledging the gold bars .
When the time comes to unpledge after a few years .
If the gold bars happens to be the copper gold painted ; whom would u hold responsible ?
The fraud could have done by the pledgor or the fraud also could have been done by the pledgee !!!

But how and who will prove the right ?

@RahulKhanna I read your latest post on Gold

I would like your comments on this thread i.e. about the recent Gold fraud in China and a related question - how safe and genuine are the gold beneath the Gold ETFs and Gold funds we invest in.

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@Bhuvan maybe we should get someone from the AMC side and companies who power gold purchases on wallets (MMTC, Safegold, etc) to clarify on this.

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On Friday evening, I attended a Zoom session organized by @Quantum_AMC where Chirag Mehta, the Fund Manager of Quantum Gold ETF answered many of our questions. While we await the AMC to upload the video on YouTube, I am sharing a few screenshots from the session.

@Bhuvan @nithin Can we get a point of view from a different AMC as well say, Nippon since Gold Bees is the most popular one amongst Gold ETFs.


Was already working on it. I’ll create a post for this.

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Here’s a really cool one. We also have a webinar macro perspective on the case for gold coming up this week.

@Bhuvan @nithin I had also attended another session by @Quantum_AMC about 2 weeks back, where veteran Investor Ajit Dayal interacted with us online. He made an interesting point about Sovereign Gold Bond and why he recommends Gold ETFs and not SGB.

Watch it from 1:30 - 1:34 in the timeline.

He further says that SGB is not backed by real Gold. It is backed by a Promise, a guarantee by the Sovereign Govt for the price of Gold. And a promise may break. You can liquidate a Gold ETF into a Gold bar and get physical delivery of Gold. But not in case of a SGB.

But sir, the promise backed by sovereign guarantee

If you can’t trust the govt, don’t know what you will :slightly_smiling_face:

He is basically saying that by taking SGB we are not de-risking ourselves because the backing is not physical gold. System is the correct word rather than Govt. Of course, the system values Gold today. Someday it may ever happen in the future that the system starts devaluing Gold and something else takes that place. Or it may never happen.

I watched it in parts. Let me know the timings of that webinar. Will block my time accordingly.

Well, you can’t trust the government. They might add extra/new tax on SGB.

The government invested the LIC’s money on many bad stocks and lost it.

If one doesn’t trust the government they could consider bitcoin.

Doesn’t seem well researched. No one can ‘tweak’ their computer to make billions of bitcoin.

True, but Bitcoins can be mined right?

@Bhuvan, here that zoom session by Quantum AMC on Gold that I spoke about.

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Yes, the issuance is fixed and can’t be changed.

SGB seems to be a better option.