# SPDR Gold Trust: Form 10-Q for the period ended Jun 30, 2020

- Company: [SPDR Gold Trust](/companies/gld.md) (CIK 1222333)
- Form: 10-Q
- Filed: 2020-08-07
- Accepted by EDGAR: Aug 7, 2020, 19:37 ET
- Period: 2020-06-30
- Accession: 0001193125-20-213577
- Inline XBRL: yes
- Main document: https://www.sec.gov/Archives/edgar/data/1222333/000119312520213577/d32807d10q.htm
- All documents and exhibits: https://www.sec.gov/Archives/edgar/data/1222333/000119312520213577/

## Figures reported in this filing

Standardized XBRL line items for the period ended 2020-06-30.

| Line item | Period | Value | XBRL concept |
| --- | --- | ---: | --- |
| Net income | 3 months, 2020-04-01 to 2020-06-30 | $5.29bn | us-gaap:NetIncomeLoss |
| Net income | 9 months, 2019-10-01 to 2020-06-30 | $8.65bn | us-gaap:NetIncomeLoss |
| Basic EPS | 3 months, 2020-04-01 to 2020-06-30 | $14.23 | us-gaap:EarningsPerShareBasic |
| Basic EPS | 9 months, 2019-10-01 to 2020-06-30 | $26.13 | us-gaap:EarningsPerShareBasic |
| Operating cash flow | 3 months, 2020-04-01 to 2020-06-30 | $0 | us-gaap:NetCashProvidedByUsedInOperatingActivities |
| Operating cash flow | 9 months, 2019-10-01 to 2020-06-30 | $0 | us-gaap:NetCashProvidedByUsedInOperatingActivities |
| Total assets | at 2020-06-30 | $67.02bn | us-gaap:Assets |
| Total liabilities | at 2020-06-30 | $20.9m | us-gaap:Liabilities |

## Management's discussion and analysis

As filed, 13,057 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, as amended, 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 (the “Trust”) is an investment trust that was formed on November 12, 2004 (the “Date of Inception”). The Trust issues baskets of Shares (“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, UBS Securities LLC and Virtu Americas 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:

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, at the earlier of the LBMA Gold Price PM for the day or 12:00 PM New York time. If no LBMA Gold Price PM is announced on a particular evaluation day or if the LBMA Gold Price PM has not been announced by 12:00 PM New York time on a particular evaluation day, the next most recent LBMA Gold Price (AM or PM) is used in the determination of the NAV of the Trust, unless the Trustee, in consultation with the Sponsor, determines that such price is inappropriate to use as the basis for such determination. In the event the Trustee and the Sponsor determine that such price 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 fees, expenses and other liabilities of the Trust from the total value of the gold and all other assets of the Trust (other than any amounts credited to the Trust’s reserve account, if established). 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.

Inspectorate International Limited conducts two counts each year of the gold bullion held on behalf of the Trust at the vaults of the Custodian. A complete bar count is conducted once per year and coincides with the Trust’s financial year end at September 30th. The second count is a random sample count and is conducted at a date which falls within the same financial year and was conducted most recently on February 24, 2020. The Sponsor generally visits the vaults of the Custodian twice a year as part of its due diligence procedures.

### Recent Developments

The Trust as well as the Sponsor and its service providers are vulnerable to the effects of public health crises, including the ongoing novel coronavirus pandemic (the “COVID-19 pandemic”).

Pandemics and other public health crises may cause a curtailment of business activities which may potentially impact the ability of the Sponsor and its service providers to operate. The COVID-19 pandemic or a similar public health threat could adversely impact the Trust by causing operating delays and disruptions, market disruption and shutdowns (including as a result of government regulation and prevention measures). The COVID-19 pandemic has had and will likely continue to have serious negative effects on social, economic and financial systems, including significant uncertainty and volatility in the financial markets.

Governmental authorities and regulators throughout the world have, in the past, responded to major economic disruptions with a variety of fiscal and monetary policy changes, such as quantitative easing, new monetary programs and lower interest rates. An unexpected or quick reversal of these policies, or the ineffectiveness of these policies, is likely to increase volatility in the market generally, and could specifically increase volatility in the market for gold, which could adversely affect the price of the Shares. The outbreak could also cause the closure of futures exchanges, which could eliminate the ability of Authorized Participants to hedge purchases of Baskets, increasing trading costs of Shares and resulting in a sustained premium or discount in the Shares. The duration of the outbreak and its effects cannot be determined with any reasonable amount of certainty. A prolonged outbreak could result in an increase of the costs of the Trust, affect liquidity in the market for gold as well as the correlation between the price of the Shares and the net asset value of the Trust, any of which could adversely and materially affect the value of your Shares. The outbreak could impair information technology and other operational systems upon which the Trust’s service providers, including the Sponsor, the Trustee and the Custodian, rely, and could otherwise disrupt the ability of employees of the Trust’s service providers to perform essential tasks on behalf of the Trust.

To date, the impact of COVID-19 has not materially affected the operations of the Trust.

### Results of Operations

In the three months ended June 30, 2020, an additional 81,100,000 Shares (811 Baskets) were created in exchange for 7,625,451.5 ounces of gold, 8,300,000 Shares (83 Baskets) were redeemed in exchange for 780,277.5 ounces of gold, and 32,347.9 ounces of gold were sold to pay expenses.

At June 30, 2020, the Custodian held 37,902,740.8 ounces of gold on behalf of the Trust, 100% of which is allocated gold in the form of good delivery gold bars with a market value of $67,015,836,086 (cost—$54,307,578,223) and which includes gold held with a subcustodian (Bank of England). The greatest amount of gold held by Bank of England during the quarter ended June 30, 2020 was approximately 2,251,607 ounces or 6.3% of the Trust’s gold on May 21, 2020. At June 30, 2020, Bank of England held approximately 1,283,665 ounces or 3.4% of the Trust’s gold in an allocated account.

As at September 30, 2019, the Custodian held 29,737,588 ounces of gold in its vault, 100% of which is allocated gold in the form of good delivery gold bars with a market value of $44,169,239,649 (cost—$39,069,053,854). Subcustodians did not hold any gold on behalf of the Trust.

On September 19, 2019, Inspectorate International Limited, or Inspectorate, concluded the annual full count of the Trust’s gold bullion held by the Custodian. On October 1, 2019, Inspectorate concluded reconciliation procedures from June 28, 2019 through September 30, 2019. The results can be found on www.spdrgoldshares.com.

#### Cash Resources and Liquidity

At June 30, 2020, 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 July 1, 2015 to June 30, 2020 and is based on the LBMA Gold Price PM when available.

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 June 30, 2020, based on the LBMA Gold Price PM, were:

| Period | Average | High | Date | Low | Date | End of period | Last business day(1) |  |
| --- | ---: | ---: | --- | ---: | --- | ---: | --- | ---: |
| Three months to September 30, 2017 | $1,277.91 | $1,346.25 | Sep 8, 2017 | $1,211.05 | July 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 | $1,354.95 | Jan 25, 2018 | $1,307.75 | Mar 1, 2018 | $1,323.85 | Mar 29, 2018 |  |
| Three months to June 30, 2018 | $1,305.99 | $1,351.45 | Apr 18, 2018 | $1,250.45 | June 29, 2018 | $1,250.45 | June 29, 2018 |  |
| Three months to September 30, 2018 | $1,213.19 | $1,262.05 | July 9, 2018 | $1,178.40 | Aug 17, 2018 | $1,187.25 | Sep 28, 2018 |  |
| Three months to December 31, 2018 | $1,226.28 | $1,279.00 | Dec 28, 2018 | $1,185.55 | Oct 9, 2018 | $1,281.65 | Dec 31, 2018 | (2) |
| Three months to March 31, 2019 | $1,303.79 | $1,343.75 | Feb 20, 2019 | $1,279.55 | Jan 21, 2019 | $1,295.40 | Mar 29, 2019 |  |
| Three months to June 30, 2019 | $1,309.39 | $1,431.40 | Jun 25, 2019 | $1,269.50 | Apr 23, 2019 | $1,409.00 | Jun 28, 2019 |  |
| Three months to September 30, 2019 | $1,472.47 | $1,546.10 | Sep 4, 2019 | $1,388.65 | Jul 5, 2019 | $1,485.30 | Sep 30, 2019 |  |
| Three months to December 31, 2019 | $1,480.96 | $1,517.10 | Oct 3, 2019 | $1,452.05 | Nov 12, 2019 | $1,523.00 | Dec 31, 2019 | (2) |
| Three months to March 31, 2020 | $1,582.80 | $1,683.65 | Mar 6, 2020 | $1,474.25 | Mar 19, 2020 | $1,608.95 | Mar 31, 2020 |  |
| Three months to June 30, 2020 | $1,711.13 | $1,771.60 | June 29, 2020 | $1,576.55 | Apr 1, 2020 | $1,768.10 | June 30, 2020 |  |
| Twelve months ended June 30, 2018 | $1,297.21 | $1,354.95 | Jan 25, 2018 | $1,211.05 | Jul 11, 2017 | $1,250.45 | June 29, 2018 |  |
| Twelve months ended June 30, 2019 | $1,262.74 | $1,431.40 | June 25, 2019 | $1,178.40 | Aug 17, 2018 | $1,409.00 | June 28, 2019 |  |
| Twelve months ended June 30, 2020 | $1,560.35 | $1,771.60 | June 29, 2020 | $1,388.65 | July 5, 2019 | $1,768.10 | June 30, 2020 |  |
| November 12, 2004 to June 30, 2020 | $1,147.72 | $1,895.00 | Sep 5, 2011 | $411.10 | Feb 8, 2005 | $1,768.10 | June 30, 2020 |  |

(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 2019, 2018 or 2017. The LBMA Gold Price AM on the last business day of December 2019, 2018 or 2017 was $1,523.00, $1,281.65 and $1,296.50, respectively. The Net Asset Value of the Trust on December 31, 2019, 2018 and 2017 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, 3,089 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, 2019, 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 2019 Annual Report on Form 10-K, except for the following:

**The Trust as well as the Sponsor and its service providers are vulnerable to the effects of public health crises, including the ongoing novel coronavirus pandemic (the “COVID-19 pandemic”).**

Pandemics and other public health crises may cause a curtailment of business activities which may potentially impact the ability of the Sponsor and its service providers to operate. The COVID-19 pandemic or a similar public health threat could adversely impact the Trust by causing operating delays and disruptions, market disruption and shutdowns (including as a result of government regulation and prevention measures). The COVID-19 pandemic has had and will likely continue to have serious negative effects on social, economic and financial systems, including significant uncertainty and volatility in the financial markets.

Governmental authorities and regulators throughout the world have, in the past, responded to major economic disruptions with a variety of fiscal and monetary policy changes, such as quantitative easing, new monetary programs and lower interest rates. An unexpected or quick reversal of these policies, or the ineffectiveness of these policies, is likely to increase volatility in the market generally, and could specifically increase volatility in the market for gold, which could adversely affect the price of the Shares. The outbreak could also cause the closure of futures exchanges, which could eliminate the ability of Authorized Participants to hedge purchases of Baskets, increasing trading costs of Shares and resulting in a sustained premium or discount in the Shares. The duration of the outbreak and its effects cannot be determined with any reasonable amount of certainty. A prolonged outbreak could result in an increase of the costs of the Trust, affect liquidity in the market for gold as well as the correlation between the price of the Shares and the net asset value of the Trust, any of which could adversely and materially affect the value of your Shares. The outbreak could impair information technology and other operational systems upon which the Trust’s service providers, including the Sponsor, the Trustee and the Custodian, rely, and could otherwise disrupt the ability of employees of the Trust’s service providers to perform essential tasks on behalf of the Trust. To date, the impact of COVID-19 has not materially affected the operations of the Trust.

The risks described 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 Aug 7, 2020.
Source: SEC EDGAR, the filing index for accession 0001193125-20-213577. Last ingested by Listed: Oct 24, 2026, 15:10 ET. No prices; not investment advice.