“Barclays Global Investors (BGI) said on Wednesday it has no plans to scale back its iShares precious metals exchange-traded products (ETPs) despite worries that U.S. regulators may impose new position limits on commodity futures.  A principal at Barclays Global Investors said that the precious metals trusts would not be affected by limits on futures trading because they own physical gold and silver bullion held by a custodian on behalf of the trusts,” Reuters Reports.

On Monday, BGI said in a statement that it has temporarily suspended new shares creation of its iShares S&P GSCI Commodity-Indexed Trust (GSG) to protect existing investors from market reactions to proposed commodity futures regulations.  Christine Hudacko, a principal at BGI, told Reuters in a phone interview there had been a surge of interest in the S&P GSCI trust prior to Monday as investors acted upon the regulatory uncertainty and added positions to the fund. “We did not max out or hit our position limit, but we were getting really close and probably would have. We felt that we needed to be proactive and temporarily stopped issuance,” Hudacko said. “The regulators have not done anything to our product. We did not take the action because we thought something was going to happen to our product. It was more about what was happening in the marketplace,” she said.

“Hudacko said that the other two iShares commodity ETPs, the Silver Trust (SLV) and the COMEX Gold Trust (IAU), would not be affected because the two products do not hold commodity futures. Unlike the GSCI fund, the precious metals trusts own physical gold and silver bullion held by a custodian on behalf of the trusts,” Reuters Reports.

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