# SPDR Gold Trust: Form 10-Q for the period ended Mar 31, 2018

- Company: [SPDR Gold Trust](/companies/gld.md) (CIK 1222333)
- Form: 10-Q
- Filed: 2018-05-02
- Accepted by EDGAR: May 2, 2018, 16:43 ET
- Period: 2018-03-31
- Accession: 0001193125-18-148776
- Inline XBRL: yes
- Main document: https://www.sec.gov/Archives/edgar/data/1222333/000119312518148776/d539066d10q.htm
- All documents and exhibits: https://www.sec.gov/Archives/edgar/data/1222333/000119312518148776/

## Figures reported in this filing

Standardized XBRL line items for the period ended 2018-03-31.

| Line item | Period | Value | XBRL concept |
| --- | --- | ---: | --- |
| Net income | 3 months, 2018-01-01 to 2018-03-31 | $706.8m | us-gaap:NetIncomeLoss |
| Net income | 6 months, 2017-10-01 to 2018-03-31 | $1.03bn | us-gaap:NetIncomeLoss |
| Basic EPS | 3 months, 2018-01-01 to 2018-03-31 | $2.49 | us-gaap:EarningsPerShareBasic |
| Basic EPS | 6 months, 2017-10-01 to 2018-03-31 | $3.60 | us-gaap:EarningsPerShareBasic |
| Cash and equivalents | at 2018-03-31 | $0 | us-gaap:CashAndCashEquivalentsAtCarryingValue |
| Total assets | at 2018-03-31 | $36.01bn | us-gaap:Assets |
| Total liabilities | at 2018-03-31 | $12.2m | us-gaap:Liabilities |

## Management's discussion and analysis

As filed, 10,218 characters.

*This information should be read in conjunction with the financial statements and notes included in Item 1 of Part I of this Quarterly Report. The discussion and analysis which follows may contain trend analysis and other forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934 which reflect our current views with respect to future events and financial results. Words such as “anticipate,” “expect,” “intend,” “plan,” “believe,” “seek,” “outlook” and “estimate” as well as similar words and phrases signify forward-looking statements. SPDR® Gold Trust’s forward-looking statements are not guarantees of future results and conditions and important factors, risks and uncertainties may cause our actual results to differ materially from those expressed in our forward-looking statements.*

### Trust Overview

SPDR® Gold Trust is an investment trust that was formed on November 12, 2004 (“Date of Inception”). The Trust issues baskets of Shares, or Baskets, in exchange for deposits of gold and distributes gold in connection with the redemption of Baskets. The investment objective of the Trust is for the Shares to reflect the performance of the price of gold bullion, less the expenses of the Trust’s operations. The Shares are designed to provide investors with a cost effective and convenient way to invest in gold.

Gold is held by HSBC Bank plc (the “Custodian”) on behalf of the Trust.

As of the date of this quarterly report, Credit Suisse Securities (USA) LLC, Goldman, Sachs & Co., Goldman Sachs Execution & Clearing, L.P., HSBC Securities (USA) Inc., J.P. Morgan Securities LLC, Merrill Lynch Professional Clearing Corp., Morgan Stanley & Co. LLC, RBC Capital Markets LLC, Scotia Capital (USA) Inc., UBS Securities LLC, and Virtu Financial BD LLC are the only Authorized Participants. An updated list of Authorized Participants can be obtained from the Trustee or the Sponsor.

Investing in the Shares does not insulate the investor from certain risks, including price volatility. The following chart illustrates the movement in the price of the Shares and NAV of the Shares against the corresponding gold price (per 1/10 of an oz. of gold) since the day the Shares first began trading on the NYSE:

### Share price & NAV v. gold price - November 18, 2004 to March 31, 2018

The divergence of the price of the Shares and NAV of the Shares from the gold price over time reflects the cumulative effect of the Trust expenses that arise if an investment had been held since inception.

### Critical Accounting Policy

### Valuation of Gold, Definition of NAV

The Trustee values the gold held by the Trust and determines the NAV of the Trust as of the LBMA Gold Price PM on each day that the NYSE Arca is open for regular trading unless there is no LBMA Gold Price on such day or the LBMA Gold Price has not been announced by 12:00 PM New York time on such day or the Valuation Time.

At the Valuation Time, the Trustee values the Trust’s gold on the basis of that day’s LBMA Gold Price PM or, if no LBMA Gold Price PM is made on such day or has not been announced by the Valuation Time, the next most recent LBMA Gold Price (AM or PM) determined prior to the Valuation Time will be used, unless the Trustee, in consultation with the Sponsor, determines that such price is inappropriate as a basis for valuation. In the event the Trustee and the Sponsor determine that the LBMA Gold Price PM or last prior LBMA Gold Price (AM or PM) is not an appropriate basis for valuation of the Trust’s gold, they will identify an alternative basis for such valuation to be employed by the Trustee. While we believe that the LBMA Gold Price is an appropriate indicator of the value of gold, there are other indicators that are available that could be different than the LBMA Gold Price. The use of such an alternative indicator could result in materially different fair value pricing of the gold in the Trust which could result in different market adjustments or redemption value adjustments of our outstanding redeemable Shares.

Once the value of the gold has been determined, the Trustee subtracts all estimated accrued sponsor fees, expenses and other liabilities of the Trust from the total value of the gold and all other assets of the Trust. The resulting figure is the NAV of the Trust. The Trustee determines the NAV per Share by dividing the NAV of the Trust by the number of Shares outstanding as of the close of trading on NYSE Arca.

### Results of Operations

In the three months ended March 31, 2018, an additional 23,100,000 Shares (231 Baskets) were created in exchange for 2,191,366 ounces of gold, 19,900,000 Shares (199 Baskets) were redeemed in exchange for 1,887,968 ounces of gold, and 26,183 ounces of gold were sold to pay expenses.

At March 31, 2018, the Custodian held 27,203,556 ounces of gold on behalf of the Trust in its vault, 100% of which is allocated gold in the form of London Good Delivery gold bars with a market value of $36,013,427,615 (cost — $34,157,979,092). Subcustodians did not hold any gold in their vaults on behalf of the Trust.

At September 30, 2017, the Custodian held 27,799,256 ounces of gold on behalf of the Trust, 100% of which is allocated gold in the form of London Good Delivery gold bars with a market value of $35,669,225,374 (cost —$34,720,945,067). Subcustodians did not hold any gold in their vaults on behalf of the Trust.

On March 1, 2018, Inspectorate International Limited, or Inspectorate, concluded the annual random sample count of the Trust’s gold bullion held by the Custodian. The sample count was based on the Trust’s inventory of gold as of February 9, 2018. Inspectorate reported that there were no anomalies identified within the Trust’s gold holdings as of such date. The results can be found on www.spdrgoldshares.com.

#### Cash Resources and Liquidity

At March 31, 2018, the Trust did not have any cash balances. When selling gold to pay expenses, the Trustee endeavors to sell the exact amount of gold needed to pay expenses in order to minimize the Trust’s holdings of assets other than gold. As a consequence, we expect that the Trust will not record any net cash flow from its operations and that its cash balance will be zero at the end of each reporting period.

#### Analysis of Movements in the Price of Gold

As movements in the price of gold are expected to directly affect the price of the Trust’s Shares, investors should understand what the recent movements in the price of gold have been. Investors, however, should also be aware that past movements in the gold price are not indicators of future movements. This section identifies recent trends in the movements of the gold price.

The following chart provides historical background on the price of gold. The chart illustrates movements in the price of gold in US dollars per ounce over the period from April 1, 2013 to March 31, 2018, and is based on the LBMA Gold Price PM when available since March 20, 2015 and previously the London PM Fix.

### Daily gold price - April 1, 2013 to March 31, 2018

The average, high, low and end-of-period gold prices for the three and twelve month periods over the prior three years and for the period from the Date of Inception through March 31, 2018, based on the LBMA Gold Price PM (formerly the London PM Fix), were:

| Period | Average | High | Date | Low | Date | End of period | Last business day(1) |  |
| --- | ---: | ---: | --- | ---: | --- | ---: | --- | ---: |
| Three months to June 30, 2015 | $1,192.19 | $1,225.00 | May 14, 2015 | $1,164.60 | Jun 05, 2015 | $1,171.00 | Jun 30, 2015 |  |
| Three months to September 30, 2015 | $1,123.87 | $1,168.00 | Jul 01, 2015 | $1,080.80 | Jul 24, 2015 | $1,114.00 | Sep 30, 2015 |  |
| Three months to December 31, 2015 | $1,105.29 | $1,184.25 | Oct 15, 2015 | $1,049.40 | Dec 17, 2015 | $1,062.25 | Dec 31, 2015 | (2) |
| Three months to March 31, 2016 | $1,184.30 | $1,277.50 | Mar 04, 2016 | $1,077.00 | Jan 05, 2016 | $1,237.00 | Mar 31, 2016 |  |
| Three months to June 30, 2016 | $1,260.03 | $1,324.55 | Jun 27, 2016 | $1,212.10 | May 31, 2016 | $1,320.75 | Jun 30, 2016 |  |
| Three months to September 30, 2016 | $1,323.40 | $1,366.25 | Jul 06, 2016 | $1,308.35 | Sep 16, 2016 | $1,322.50 | Sep 30, 2016 |  |
| Three months to December 31, 2016 | $1,218.75 | $1,313.30 | Oct 03, 2016 | $1,125.70 | Dec 20, 2016 | $1,159.10 | Dec 30, 2016 | (2) |
| Three months to March 31, 2017 | $1,219.47 | $1,257.55 | Mar 27, 2017 | $1,151.00 | Jan 03, 2017 | $1,244.85 | Mar 31, 2017 |  |
| Three months to June 30, 2017 | $1,256.59 | $1,293.50 | Jun 06, 2017 | $1,220.40 | May 09, 2017 | $1,242.25 | Jun 30, 2017 |  |
| Three months to September 30, 2017 | $1,277.91 | $1,346.25 | Sep 08, 2017 | $1,211.05 | Jul 11, 2017 | $1,283.10 | Sep 29, 2017 |  |
| Three months to December 31, 2017 | $1,275.42 | $1,303.30 | Oct 16, 2017 | $1,240.90 | Dec 12, 2017 | $1,296.50 | Dec 29, 2017 | (2) |
| Three months to March 31, 2018 | $1,329.29 | $1354.95 | Jan 25, 2018 | $1,307.75 | Mar 1, 2018 | $1,323.85 | Mar 29, 2018 |  |
| Twelve months ended March 31, 2016 | $1,150.86 | $1,277.50 | Mar 04, 2016 | $1,049.40 | Dec 17, 2015 | $1,237.00 | Mar 31, 2016 |  |
| Twelve months ended March 31, 2017 | $1,258.63 | $1,366.25 | Jul 06, 2016 | $1,125.70 | Dec 20, 2016 | $1,244.85 | Mar 31, 2017 |  |
| Twelve months ended March 31, 2018 | $1,285.08 | $1,354.95 | Jan 25, 2018 | $1,211.05 | Jul 11, 2017 | $1,323.85 | Mar 29, 2018 |  |
| November 12, 2004 to March 31, 2018 | $1,105.20 | $1,895.00 | Sep 05, 2011 | $411.10 | Feb 08, 2005 | $1,323.85 | Mar 29, 2018 |  |

(1) The end of period gold price is the LBMA Gold Price PM on the last business day of the period. This is in accordance with the Trust Indenture and the basis used for calculating the Net Asset Value of the Trust.

(2) There was no LBMA Gold Price PM on the last business day of December 2017, 2016 or 2015. The LBMA Gold Price AM on the last business day of December 2017, 2016 and 2015 was $1,296.50, $1,159.10 and $1,062.25, respectively. The Net Asset Value of the Trust on December 31, 2017, 2016 and 2015 was calculated using the LBMA Gold Price AM, in accordance with the Trust Indenture.

## Market risk

As filed, 362 characters.

The Trust Indenture does not authorize the Trustee to borrow for payment of the Trust’s ordinary expenses. The Trust does not engage in transactions in foreign currencies which could expose the Trust or holders of Shares to any foreign currency related market risk. The Trust does not invest in any derivative financial instruments or long-term debt instruments.

## Controls and procedures

As filed, 1,464 characters.

The duly authorized officers of the Sponsor, performing functions equivalent to those a principal executive officer and principal financial officer of the Trust would perform if the Trust had any officers, have evaluated the effectiveness of the Trust’s disclosure controls and procedures, and have concluded that the disclosure controls and procedures of the Trust were effective as of the end of the period covered by this report. Such disclosure controls and procedures are designed to provide reasonable assurance that information required to be disclosed in the reports that the Trust files or submits under the Securities Exchange Act of 1934, as amended, are recorded, processed, summarized and reported, within the time period specified in the applicable rules and forms, and that such information is accumulated and communicated to the duly authorized officers of the Sponsor performing functions equivalent to those a principal executive officer and principal financial officer of the Trust would perform if the Trust had any officers, and to the Audit Committee of the Sponsor, as appropriate, to allow timely decisions regarding required disclosure.

*Internal control over financial reporting.* There has been no change in the internal control over financial reporting that occurred during our most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the Trust’s internal control over financial reporting.

## Risk factors

As filed, 1,684 characters.

You should carefully consider the factors discussed in Part I, Item 1A. “Risk Factors” in our Annual Report on Form 10-K for the year ended September 30, 2017, which could materially affect our business, financial condition or future results. There have been no material changes in our risk factors from those disclosed in our 2017 Annual Report on Form 10-K, except for the following:

**The Trust relies on the information and technology systems of the Trustee, the Custodian, the Marketing Agent and, to a lesser degree, the Sponsor, which could be adversely affected by information systems interruptions, cybersecurity attacks or other disruptions which could have a material adverse effect on our record keeping and operations.**

The Custodian, the Trustee and the Marketing Agent depend upon information technology infrastructure, including network, hardware and software systems to conduct their business as it relates to the Trust. A cybersecurity incident, or a failure to protect their computer systems, networks and information against cybersecurity threats, could result in a loss of information and adversely impact their ability to conduct their business, including their business on behalf of the Trust. Despite implementation of network and other cybersecurity measures, their security measures may not be adequate to protect against all cybersecurity threats.

The risks described above and in our Annual Report on Form 10-K are not the only risks facing the Trust. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial also may materially adversely affect our business, financial condition and/or operating results.

Filed May 2, 2018.
Source: SEC EDGAR, the filing index for accession 0001193125-18-148776. Last ingested by Listed: Oct 24, 2026, 15:10 ET. No prices; not investment advice.