Buying an insurance policy against failure of the insurance industry from an insurance company is nonsense. If the insured event occurred, the company that sold the policy would fail and the policy would be worthless.

So why would you own GLD? Sure, it offers exposure to the spot gold price. But when things go haywire, GLD exposes you to many counterparties, which would be BNY Mellon Asset Servicing (Trustee), which is a division of The Bank of New York Mellon, HSBC (Custodian), potential sub-custodians (The Bank of England, ICBC Standard Bank, JPMorgan, Scotiabank, and UBS), NYSE Arca, and the Authorized Participants. Owning GLD is like owning a gold derivative with as much counterparty risk as possible.

Not surprisingly, the GLD prospectus reads like an endless disclaimer. On page 11, it states, “the Custodian will not be liable for any delay in performance … of any of its obligations … beyond its reasonable control, including acts of God…”. And on page 13, “In the event of the insolvency of the Custodian, a liquidator may seek to freeze access to the gold held in all of the accounts held by the Custodian, including the Trust Allocated Account.”

The problem with all the counterparties involved with GLD is that they don’t primarily deal with gold. These are the biggest banks in the world, and if any branch of these banks fails, it can have consequences for the entire entity, and GLD will potentially suffer too. In my view, it’s best to store gold outside of the financial system

https://www.zerohedge.com/commodities/are-underlying-mechanics-largest-gold-etf-cause-concern