World Gold Council''s bullion fund reports strong demand

Section:

http://www.reuters.com/newsArticle.jhtml?type=topNews&storyID=5068072

LIMA, Peru, May 6 (Reuters) -- Gold Bullion Securities saw
renewed demand for its new investment instrument in April,
after it relaunched a slightly revamped version of its
shares, each of which represents a tenth of an ounce of
gold, a GBS official said on Thursday.

As of mid-April GBS had a little over $750 million combined
in the London and Australian listed shares of the new
instrument, representing a little under 60 tonnes of gold, up
from 34 tonnes in February, said George Milling-Stanley,
an official with the World Gold Council, which developed
and promoted GBS.

In a presentation at a gold industry event in Lima,
Milling-Stanley said the London shares, launched in
December, had a burst of activity in April after
adjustments.

"Some investment institutions expressed reservations as to
whether the securities would fit into their investment
mandates. As a result of this we agreed a few minor
structural adjustments with the regulators and with the
investment community and launched a new version at the
end of March," Milling-Stanley said.

Milling-Stanley said the idea of the product is to help
investors diversify portfolios by making direct investments
in gold -- instead of in gold mining companies or in gold
commodities futures.

He said the shares scheme was more practical than
buying bullion or coins, which have to be stored and
insured.

Different investors and dealers are still getting internal
approval to be able to purchase the instrument, he said.

GBS is in talks with regulators to list in the United
States, he said.

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