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TFC Commodity Trading Forum

Is GLD the real deal or a ponzi scheme?

People like Jim Sinclair and Alf Fields, who have been very accurate about the price of gold, think that this is just the very beginning of the gold rally. Sinclair states that if gold breaks $1,764, it could increase exponentialy up to around $3,500. Both Fields and Sinclair predict an all time high of around $12,500 and higher (several years from now). Since these guys have been very accurate, I think it is worth considering the possibility they may be right again...

If so, both recommend "physical gold," but this seems pretty cumbersome. What about GLD? If gold continues to go up like these gentlemen predict, can we count on GLD to follow the gold spot price like it has been doing? I heard someone on CNBC say that GLD is just a big ponzi scheme (not believing that they acually have physical gold to back up all of the shares). He recommended CEF instead, but today CEF tanked for some strange reason (down nearly 4.7% from the open), while GLD continued to move right along with the price of spot gold. Bottom line, can GLD be trusted as a long-term investment, which will closely follow the price of physical gold or is it possibley some kind of derivitive nightmare waiting to burst?

Best wishes to all of you!
-Andrew