| NEW YORK, July 23
NEW YORK, July 23 Merk Gold Trust, a
bullion-backed exchange-traded fund which allows its shares to
be redeemed for physical gold, said on Wednesday it has made its
first delivery in dozens of U.S. gold coins to an investor.
The ETF, launched by Palo Alto, California-based Merk Funds
in May to offer a liquid trading product with the benefits of
physical gold bullion, has accumulated 40,000 ounces in two
months even in a bearish gold market.
The fund, trading on the NYSE Arca platform with the ticker
OUNZ, owns less than 1 percent of gold held by SPDR Gold Shares
, the world's biggest gold ETF. However, many
participants are warming to the idea that the product could
bridge the gap between the physical and paper gold markets.
A record two-day $225 drop in gold prices in April 2013 has
boosted interest in physical gold and silver coin and bars, even
as institutional investors continued to sell gold ETFs on a lack
of inflation and as the Federal Reserve is set to unwind its
Merk Funds, which offers currency mutual funds to hedge
against any depreciation of the dollar caused by unsound U.S.
monetary policies, said the individual investor submitted 5,406
shares of OUNZ and requested the delivery of 54 American Buffalo
24-carat gold coins last week. The gold coins was delivered on
Tuesday, Merk said.
The company did not provide any further details.
The ETF can also deliver gold in 400-ounce London bars,
American Eagle 18-carat gold coins, and other one-ounce coin and
bars. Processing fees can go as high as $7,000 or 7 percent of
the transaction, but they drop as the size of physical
Merk Funds President Axel Merk said the ETF received a U.S.
patent for its efficient commodity delivery process which can
handle numerous requests by retail investors.
SPDR Gold Trust investors who wish to redeem their shares in
gold can liaise with the ETF's authorized participants, making
physical delivery requests by small retail investors very
difficult, if not impossible.
(Reporting by Frank Tang; Editing by Richard Chang)