once upon a time a wily old trader made a very good living trading sardines. he would buy and sell them by the truckload. one day he hired a young assistant to help him run the business. on his first day at work, the young man didn't have anything to eat for lunch, so he decided to help himself to a couple of tins of sardines from one of the trucks. but when he opened the first can, it was full of sand. the other can, the same thing...nothing but sand.

so he complained about to his boss, but the wily old trader just laughed and said, "those aren't eating sardines, those are just buying and selling sardines!"

i don't think there is anywhere close to 1100 tons of gold in the etf. gld has one purpose, and that is to sop up investor demand for gold, supplying paper instead of bullion. slv for silver is an even worse offender. but they are convenient, and as long as investors accept them as being the same as bullion, they will function as trading vehicles for the metals. but one of these days, someone will open up a tin...