Gold Rush Continue – This Time It’s University of Texas

By Lawrence

I thought people in China buying gold in large quantity was an interesting story to tell everyone.

Now we know Americans always beat everyone else when it comes to being the biggest buyer in something. Here is a story from Bloomberg that the University of Texas Investment Management Co. took delivery of $1 billion physical gold bullion and storing that in a vault themselves.

In short, it is simply an issue of trust. The paper gold holding that U of Texas used to have is supposed to have the physical gold bars stored somewhere safely by some well known entity.

Taking physical delivery of this paper gold holding and then storing the gold bars somewhere themselves is a grand gesture.

I wonder if more trust funds will follow.


  • smilingsynic April 17, 2011 at 11:48 am

    Makes little sense. Too many other more reasonable alternatives for a hedge.

  • Lawrence Chan April 17, 2011 at 5:40 pm

    I am confused too.

    In order to use those gold bars, they need a mechanism to withdraw it from the vault, convert that into some form of cash, before the money is usable.

    Maybe they do not plan to use that at all?

  • smilingsynic April 17, 2011 at 6:45 pm

    They could sell call options against the gold they own and sell puts on gold they would like to buy.

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