# Goldman Sachs Physical Gold ETF: Form 10-Q for the period ended Jun 30, 2021

- Company: [Goldman Sachs Physical Gold ETF](/companies/aaau.md) (CIK 1708646)
- Form: 10-Q
- Filed: 2021-08-06
- Accepted by EDGAR: Aug 6, 2021, 13:43 ET
- Period: 2021-06-30
- Accession: 0001193125-21-239028
- Inline XBRL: yes
- Main document: https://www.sec.gov/Archives/edgar/data/1708646/000119312521239028/d201445d10q.htm
- All documents and exhibits: https://www.sec.gov/Archives/edgar/data/1708646/000119312521239028/

## Figures reported in this filing

Standardized XBRL line items for the period ended 2021-06-30.

| Line item | Period | Value | XBRL concept |
| --- | --- | ---: | --- |
| Net income | 3 months, 2021-04-01 to 2021-06-30 | $12.2m | us-gaap:NetIncomeLoss |
| Net income | 6 months, 2021-01-01 to 2021-06-30 | −$30.4m | us-gaap:NetIncomeLoss |
| Basic EPS | 3 months, 2021-04-01 to 2021-06-30 | $0.62 | us-gaap:EarningsPerShareBasic |
| Basic EPS | 6 months, 2021-01-01 to 2021-06-30 | −$1.48 | us-gaap:EarningsPerShareBasic |
| Total assets | at 2021-06-30 | $364.9m | us-gaap:Assets |
| Total liabilities | at 2021-06-30 | $54.9k | us-gaap:Liabilities |

## Management's discussion and analysis

As filed, 17,355 characters.

*This information should be read in conjunction with the financial statements and notes included in Item 1 of Part I of this Form 10-Q. This Form 10-Q contains “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, and such forward-looking statements involve risks and uncertainties. All statements (other than statements of historical fact) included in this Form 10-Q that address activities, events or developments that may occur in the future, including such matters as future gold prices, gold sales, costs, objectives, changes in commodity prices and market conditions (for gold and the shares), the Trust’s operations, the Sponsors’ plans and references to the Trust’s future success and other similar matters are forward-looking statements. Words such as*

*“could,” “would,” “may,” “expect,” “intend,” “estimate,” “predict,” and variations on such words or negatives thereof, and similar expressions that reflect our current views with respect to future events and Trust performance, are intended to identify such forward-looking statements. These forward-looking statements are only predictions, subject to risks and uncertainties that are difficult to predict and many of which are outside of our control, and actual results could differ materially from those discussed. Forward-looking statements involve risks and uncertainties that could cause actual results or outcomes to differ materially from those expressed therein. We express our estimates, expectations, beliefs, and projections in good faith and believe them to have a reasonable basis. However, we make no assurances that management’s estimates, expectations, beliefs, or projections will be achieved or accomplished. These forward-looking statements are based on assumptions about many important factors that could cause actual results to differ materially from those in the forward-looking statements. Such factors are discussed in: Part I, Item 1A. Risk Factors of the Trust’s Annual Report on Form 10-K for the year ended December 31, 2020 (“2020 Form 10-K”); Part II, Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations of the 2020 Form 10-K; Part I, Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations of this Form 10-Q, and other parts of this Form 10-Q. We do not intend to update any forward-looking statements even if new information becomes available or other events occur in the future, except as required by the federal securities laws.*

### Organization and Trust Overview

Goldman Sachs Physical Gold ETF (the “Trust”) is organized as a New York trust. The Trust is governed by the provisions of the First Amended and Restated Depositary Trust Agreement (as amended from time to time, the “Trust Agreement”) executed after the close of business on December 11, 2020 by Goldman Sachs Asset Management, L.P. (the “Sponsor”) and The Bank of New York Mellon (the “Trustee”). The Trust issues Goldman Sachs Physical Gold ETF Shares (the “Shares”), which represent units of fractional undivided beneficial interest in the Trust.

The Sponsor of the Trust is Goldman Sachs Asset Management, L.P., a Delaware limited partnership. Goldman Sachs Asset Management, L.P. is an indirect, wholly-owned subsidiary of The Goldman Sachs Group, Inc. (“GS Group Inc.”) and an affiliate of Goldman Sachs & Co. LLC.

The Trustee is generally responsible for the day-to-day administration of the Trust, including keeping the Trust’s operational records. JPMorgan Chase Bank, N.A. (the “Custodian”) serves as the Custodian for the Trust’s gold bullion. The Custodian is responsible for holding the Trust’s gold, as well as receiving and converting allocated and unallocated gold on behalf of the Trust.

Physical gold that the Trust holds consists of gold bullion that meets the specifications for “good delivery” gold bars (“London Good Delivery Standards”), including the specifications for weight, dimension, fineness (or purity), identifying marks and appearance of gold bars, set forth in the good delivery rules promulgated by the London Bullion Market Association (“LBMA”). The Trust issues the Shares in blocks of at least 25,000 shares called “Baskets” in exchange for gold from certain registered broker-dealers or other securities market participants (the “Authorized Participants”), which is then allocated as physical gold and stored by the Custodian. The Trust issues and redeems Baskets on an ongoing basis at net asset value (“NAV” or “Net Asset Value”) to and from Authorized Participants who have entered into a contract with the Sponsor and the Trustee.

Prior to December 14, 2020, Gold Corporation (the “Prior Custodial Sponsor”) and Exchange Traded Concepts, LLC (the “Prior Administrative Sponsor” and, together with the Prior Custodial Sponsor, the “Prior Sponsors”) were the sponsors of the Trust. The Prior Custodial Sponsor performed assaying of gold and other services relating to the safe custody of gold held by the Trust. Apart from its service as Prior Custodial Sponsor, and pursuant to separate custodial agreements with the Trustee (defined below), Gold Corporation was responsible for holding the Trust’s gold as well as receiving and converting allocated and unallocated gold on behalf of the Trust. The Prior Administrative Sponsor generally oversaw the performance of the Trustee and the Trust’s principal service providers.

Gold Corporation, trading as the Perth Mint, is a Western Australian Government-owned statutory body corporate established under the Gold Corporation Act 1987 (Western Australia) (the “Gold Corporation Act”). Under section 22 of the Gold Corporation Act, the payment of the cash equivalent of gold due, payable and deliverable by the Prior Custodial Sponsor under the Gold Corporation Act (including gold held by the Prior Custodial Sponsor for the benefit of the Trust) was guaranteed by the Treasurer of Western Australia, in the name and on behalf of the Crown in right of the State of Western Australia (the “Government Guarantee”). The Government Guarantee was subject to the claims-paying ability of the Government of Western Australia.

Virtu Financial BD LLC was the initial Authorized Participant and contributed 1,000 ounces of gold in exchange for 100,000 shares on July 24, 2018. At contribution, the value of the gold deposited with the Trust was based on the price of an ounce of gold of $1,228.35. The Trust commenced operations on July 26, 2018.

The Trust’s investment objective is for the Shares to reflect the performance of the price of gold less the expenses of the Trust’s operations. The Trust is not actively-managed. The shares trade on the NYSE Arca Marketplace (“NYSE Arca”) under the symbol “AAAU.”

The Trust’s fiscal year-end is December 31.

### Valuation of Gold and Computation of Net Asset Value

On each business day that the NYSE Arca is open for regular trading, as promptly as practicable after 4:00 p.m. New York City time, the Trustee values the gold held by the Trust and determines the Net Asset Value of the Trust, as described below.

The Net Asset Value of the Trust is the aggregate value of gold and other assets, if any, of the Trust (other than any amounts credited to the Trust’s reserve account, if any) including cash, if any, less liabilities of the Trust, which include estimated accrued but unpaid fees, expenses and other liabilities. The reserve account, if established, will be a separate non-interest bearing account with the Trustee or such other banking institution specified by the Sponsor, or if the Sponsor fails so to specify, as selected by the Trustee, in the name, and for the benefit, of the Trust, subject only to draft or order by the Trustee acting pursuant to the terms of the Trust Agreement. The Trustee will hold in such account all cash that it has credited to such account to reflect the reserves for taxes or other governmental charges and other contingent liabilities payable out of the Trust that the Trustee has determined from time to time to be required by GAAP. The Trustee also determines the Net Asset Value per Share by dividing the Net Asset Value of the Trust by the number of the Shares outstanding as of the close of trading on the NYSE Arca (which includes the net number of any Shares deemed created or redeemed on such evaluation day).

All gold is valued based on its Fine Ounce content, calculated by multiplying the weight of gold by its purity; the same methodology is applied independent of the type of gold held by the Trust. The Trustee values the gold held by the Trust based on the LBMA Gold Price PM, or the LBMA Gold Price AM, if such day’s LBMA Gold Price PM is not available. If no LBMA Gold Price PM or LBMA Gold Price AM is available for the day, the Trustee values the Trust’s gold based on the most recently announced LBMA Gold Price PM or LBMA Gold Price AM. If the Sponsor determines that such price is inappropriate to use, it must identify an alternate basis for evaluation to be employed by the Trustee. The Sponsor may instruct the Trustee to use a different price which is reasonably available to the Trustee at no cost to the Trustee that the Sponsor determines to fairly represent the commercial value of the Trust’s gold.

The Trustee’s estimation of accrued but unpaid fees, expenses and liabilities is conclusive upon all persons interested in the Trust, and no revision or correction in any computation made under the Trust Agreement is required by reason of any difference in amounts estimated from those actually paid.

The Sponsor and the investors may rely on any evaluation or determination of any amount made by the Trustee, and, except for any determination by the Sponsor as to the price to be used to evaluate gold, the Sponsor has no responsibility for the evaluation’s accuracy. The determinations the Trustee makes are made in good faith upon the basis of, and the Trustee will not be liable for any errors contained in, information reasonably available to it. The Trustee is not liable to the Sponsor, Authorized Participants, investors or any other person for errors in judgment. However, the preceding liability exclusion will not protect the Trustee against any liability resulting from bad faith or gross negligence in the performance of its duties.

### Results of Operations

### Three and Six Months Ended June 30, 2021 and 2020

For the three months ended June 30, 2021, 1,675,000 shares (67 Baskets) were created in exchange for 14,178.6 ounces of gold and 2,487.1 ounces of gold receivable, and 85.2 ounces of gold were sold to pay expenses. For the six months ended June 30, 2021, 1,675,000 shares (67 Baskets) were created in exchange for 14,178.6 ounces of gold and 2,487.1 ounces of gold receivable, and 175.8 ounces of gold were sold to pay expenses. The Trust’s NAV per share ended the period at $17.54 compared to $16.83 at March 31, 2021 and $18.83 at December 31, 2020. The change in the NAV per share was due to a change in the price of gold to $1,763.15 at period end, which represented an increase of 4.26% from $1,691.05 at March 31, 2021 and a decrease of (6.77)% from $1,891.10 at December 31, 2020.

At June 30, 2021, the Custodian held 204,468.6 ounces of gold on behalf of the Trust in its vault, with a market value of $360,508,873 (cost: $357,922,790) based on the LBMA PM Gold Price at period end.

At June 30, 2020, the Prior Custodial Sponsor held 198,854.2 ounces of gold on behalf of the Trust in its vault, with a market value of $351,594,152 (cost: $290,304,089) based on the LBMA PM Gold Price at period end.

The change in net assets from operations for the three months ended June 30, 2021 was $12,211,561, which was due to (i) the Sponsor Fee of $(158,782) and (ii) a net realized and unrealized gain of $12,370,343 from operations, which in turn resulted from a net realized loss on gold transferred to pay expenses of $(19,046) and a net change in unrealized appreciation/depreciation on investments in gold bullion of $12,389,389. Other than the Sponsor Fee, the Trust had no expenses during the three months ended June 30, 2021.

The change in net assets from operations for the three months ended June 30, 2020 was $25,084,808, which was due to (i) the fee paid to the Prior Custodial Sponsor of $(131,057) and (ii) a net realized and unrealized gain of $25,215,865 from operations, which in turn resulted from a net realized loss on gold transferred to pay expenses of $(1,314) and a net change in unrealized appreciation/depreciation on investments in gold bullion of $25,217,179. Other than the fee paid to the Prior Custodial Sponsor, the Trust had no expenses during the three months ended June 30, 2020.

The change in net assets from operations for the six months ended June 30, 2021 was $(30,423,216), which was due to (i) the Sponsor Fee of $(330,581) and (ii) a net realized and unrealized loss of $(30,092,635) from operations, which in turn resulted from a net realized gain on gold distributed for redemptions of $47,462,394, a net realized loss on gold transferred to pay expenses of $(36,110) and a net change in unrealized appreciation/depreciation on investments in gold bullion of $(77,518,919). Other than the Sponsor Fee, the Trust had no expenses during the six months ended June 30, 2021.

The change in net assets from operations for the six months ended June 30, 2020 was $34,461,167, which was due to (i) the fee paid to the Prior Custodial Sponsor of $(219,801) and (ii) a net realized and unrealized gain of $34,680,968 from operations, which in turn resulted from a net realized gain on gold distributed for redemptions of $919,264, a net realized loss on gold transferred to pay expenses of $(1,692) and a net change in unrealized appreciation/depreciation on investments in gold bullion of $33,763,396. Other than the fee paid to the Prior Custodial Sponsor, the Trust had no expenses during the six months ended June 30, 2020.

### Liquidity and Capital Resources

The Trust is not aware of any trends, demands, commitments, events or uncertainties that are reasonably likely to result in material changes to its liquidity needs. In exchange for the Sponsor Fee, the Sponsor has agreed to assume and be responsible for the payment of most of the expenses incurred by the Trust, up to a maximum amount equal to the greater of $500,000 per annum and the amount that is equal to 0.15% of the average total value of the gold held by the Trust, as determined by the Trustee on each business day, plus the value of all other assets of the Trust (other than any amount credited to the Trust’s reserve account), including cash, if any. As such, the only ordinary expense of the Trust during the period covered by this report was the Sponsor Fee. The Sponsor Fee accrues daily based on the prior business day’s NAV and is payable in cash from the Trust Property or the sale of gold in accordance with the Trust Agreement.

The Trustee will, when directed by the Sponsor, and, in the absence of such direction may, in its discretion, sell gold in such quantity and at such times as may be necessary to permit payment in cash of the Trust’s extraordinary expenses not assumed by the Sponsor. At June 30, 2021 and 2020, the Trust did not have any cash balances.

### Off-Balance Sheet Arrangement

At June 30, 2021 and 2020, the Trust did not have any off-balance sheet arrangements.

### 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, it is important for investors to understand and follow movements in the price of gold. Past movements in the gold price are not indicators of future movements.

The following chart shows movements in the price of gold based on the LBMA PM Gold Price in U.S. dollars per ounce over the period from December 30, 2020 to June 30, 2021.

Source: Bloomberg, LBMA Gold Price PM USD, December 30, 2020 – June 30, 2021

The average, high, low and end-of-period gold prices for each quarterly period from July 1, 2020 through June 30, 2021, based on the LBMA PM Gold Price were:

| Period | Average | High | Date | Low | Date | End of period |  | Last business day(1) |
| --- | ---: | ---: | --- | ---: | --- | ---: | ---: | --- |
| April 1, 2021 to June 30, 2021 | $1,816.48 | $1,902.75 | June 2, 2021 | $1,726.05 | Apr. 1, 2021 | $1,763.15 |  | Jun. 30, 2021 |
| January 1, 2021 to March 31, 2021 | $1,795.47 | $1,943.20 | Jan. 4, 2021 | $1,683.95 | Mar. 30, 2021 | $1,691.05 |  | Mar. 31, 2021 |
| October 1, 2020 to December 31, 2020 | $1,874.23 | $1,940.80 | Nov. 6, 2020 | $1,762.55 | Nov. 30, 2020 | $1,891.10 | (2) | Dec. 31, 2020 |
| July 1, 2020 to September 30, 2020 | $1,908.56 | $2,067.15 | Aug. 6, 2020 | $1,771.05 | Jul. 1, 2020 | $1,886.90 |  | Sep. 30, 2020 |

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

(2) The last business day of the period was December 31, 2020; however, no LBMA PM Gold Price was recorded on that date. Numbers provided are from LBMA AM Gold Price on December 31, 2020, the last price recorded for the period.

## Market risk

As filed, 306 characters.

The Trust is a passive investment vehicle. It is not actively managed. The Trust’s investment objective is for the Shares to reflect the performance of the price of gold less the expenses of the Trust’s operations. Accordingly, fluctuations in the price of gold will affect the value of the Trust’s shares.

## Controls and procedures

As filed, 1,569 characters.

### Conclusion Regarding the Effectiveness of Disclosure Controls and Procedures

The Trust maintains disclosure controls and procedures that are designed to ensure that information required to be disclosed in its Exchange Act reports is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to the duly authorized officers of the Sponsor, who perform functions similar to those the principal executive officer and principal financial officer of the Trust would perform if the Trust had officers, to allow timely decisions regarding required disclosure.

Under the supervision and with the participation of such duly authorized officers of the Sponsor, the Sponsor conducted an evaluation of the Trust’s disclosure controls and procedures, as defined under Exchange Act Rule 13a-15(e), as of June 30, 2021. Based on this evaluation, the duly authorized officers of the Sponsor, who perform functions similar to those the principal executive officer and principal financial officer of the Trust would perform if the Trust had officers concluded that the Trust’s disclosure controls and procedures were effective as of June 30, 2021.

### Changes in Internal Control over Financial Reporting

There was no change in the Trust’s internal control over financial reporting that occurred during the Trust’s most recently completed fiscal quarter ended June 30, 2021 that has materially affected, or is reasonably likely to materially affect, these internal controls.

## Risk factors

As filed, 340 characters.

The operations of the Trust are subject to numerous risks and uncertainties. As a result, the risks and uncertainties discussed in Part I, Item 1A. Risk Factors in the 2020 Form 10-K should be carefully considered. There have been no material changes in the assessment of the Trust’s risk factors from those set forth in the 2020 Form 10-K.

Filed Aug 6, 2021.
Source: SEC EDGAR, the filing index for accession 0001193125-21-239028. Last ingested by Listed: Nov 6, 2026, 18:32 ET. No prices; not investment advice.