What is the primary investment objective of the SPDR Gold Trust (GLD)?

The primary investment objective of the SPDR Gold Trust is for its shares to reflect the performance of the price of gold bullion, less the Trust's expenses. It aims to provide investors with a cost-effective and convenient way to gain exposure to gold.

Why did the Trust report a net loss in its first reporting period?

The Trust reported a net loss of approximately $18.2 million primarily due to an unrealized loss on its gold holdings of $20.3 million. This loss reflects the fluctuations in the market value of gold, which is valued at the lower of cost or market. This was partially offset by realized gains from selling gold to cover operational expenses and gold distributed for share redemptions.

How does the creation and redemption process affect the investment?

The Trust creates and redeems shares in large blocks ('Baskets') in exchange for physical gold. This process, combined with the Trust's ongoing expenses, means that the amount of gold backing each share gradually decreases over time. This can lead to a gradual decline in the trading price of the shares relative to the price of gold, even if the gold price remains stable.

What are the main expenses incurred by the Trust?

The main expenses incurred by the Trust include custody fees, trustee fees, sponsor fees, marketing agent fees, and other miscellaneous expenses. For the period ending December 31, 2004, total expenses amounted to $609,000.

GLD 10-Q Quarterly Report Q1 FY2005 — Revenue, Net Income, EPS

Summary

This is the first quarterly report for the SPDR Gold Trust (GLD), covering the period from its inception on November 12, 2004, through December 31, 2004. The Trust was established to provide investors with a convenient and cost-effective way to invest in gold bullion, aiming to mirror the performance of the gold price, net of expenses. During this initial period, the Trust experienced a net loss of approximately $18.2 million, primarily driven by an unrealized loss on its gold holdings amounting to over $20 million, which was partially offset by realized gains on gold sold to cover expenses and gold distributed for share redemptions. As of December 31, 2004, the Trust held approximately 2.95 million ounces of gold valued at nearly $1.3 billion. The Trust's structure involves the creation and redemption of shares in large blocks ('Baskets') directly in exchange for gold. This process, along with the Trust's operational expenses, leads to a gradual decrease in the amount of gold backing each share over time, a factor investors should consider. The Trust's financial statements are unaudited and condensed, with a recommendation to refer to the Trust's registration statement for more comprehensive information.

Key Highlights

1The SPDR Gold Trust (GLD) was established on November 12, 2004, with its first reporting period ending December 31, 2004.
2The Trust experienced a net loss of $18.2 million for the period, largely due to a significant unrealized loss on its gold holdings ($20.3 million).
3As of December 31, 2004, the Trust held approximately $1.29 billion worth of gold (2.95 million ounces), with additional gold receivable of $43.8 million.
4The Trust's primary operational mechanism involves the creation and redemption of shares in exchange for physical gold.
5Operational expenses, including custody, trustee, sponsor, and marketing fees, totaled $609,000 for the period.
6The Trust's net asset value (NAV) per share was $43.78 at December 31, 2004, compared to its inception NAV of $43.60.
7The Trust does not hold cash and has no cash flow from operations, as gold is sold to cover expenses, leading to a gradual reduction in the gold backing per share over time.

SPDR GOLD TRUST Quarterly Report for Q1 Ended Dec 31, 2004

Summary

Key Highlights

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