From the end of page 5 of the March 2009 Zeal Intelligence:

GLD’s “Duplicate Gold Bar” Uproar

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ignited a GLD panic

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I respected the activist [I assume this activist was James Turk (GoldMoney) whom we saw, as I recall, at the CMRE meeting.] personally but I knew he was a direct competitor of GLD (a fact he didn’t mention in his essay). He founded a company that was advancing digital gold for transactional use, and his company stood to lose a lot of investment capital if GLD proved successful.

Even though I had no GLD exposure ..... I dug up the GLD data to look for myself. I downloaded the 160-page file of GLD’s gold bar list. I found 78 duplicates, 156 question-able bars out of 8306. This was 1.9% of all the bars, hardly a widespread phenomenon. Also, all duplicate pairs came from only a single refinery, JMC-UK. This was intriguing.

As a CPA and former Big Six auditor, to me “duplicate” is a synonym for “identical”. Yet I looked at every single pair and found zero identical bars. The serial numbers on pairs matched, but in every single case their weights didn’t. For example, bar A of JMC-UK 2323 weighed 419.208oz while bar B of JMC-UK 2323 weighed 397.563oz. My conclusion was that they were not duplicates and had not been double counted. That day in ZS I guessed some data guy at GLD probably wrongly truncated a digit from an import of data.

I fully agreed with the activist that clarification was needed right away from GLD, but I was very sad that he decided to cry “fire” in a crowded theater without sharing all relevant facts to his readers. He took one fact, duplicate serial numbers, and twisted it out of context. Omitting other key information, he explicitly used innuendo with the intent to scare.

That night, the refiner Johnson Matthey wrote a letter to the World Gold Council (which launched GLD) clarifying the numbers on its bars. It turns out that before 2002 each bar had a number and a two-letter alpha prefix. GLD’s data did not have this alpha prefix initially, and the number part could be used again in subsequent years. It was a simple clerical error in a data file, as I suspected! The competing activist who ignited GLD’s panic never recanted. He attacked GLD because he had an agenda, not because the full set of facts warranted it. GLD’s critics usually have hidden agendas.