How has the Trust's investment in gold performed during this quarter?

The market value of the Trust's gold holdings saw a substantial increase, growing from $3,156,223,000 to $4,087,091,000 between September 30, 2005, and December 31, 2005. This resulted in a significant rise in unrealized gains to $537,369,000 as of December 31, 2005.

What was the Trust's profitability for the quarter?

The Trust reported a net loss of $3,230,000 for the three months ended December 31, 2005. This loss was primarily driven by operational expenses, including custody, trustee, and sponsor fees, which amounted to $3,477,000 for the quarter.

How does the Trust manage its expenses?

The Trust's expenses are paid by selling portions of its gold holdings. The Trustee aims to sell the smallest amount of gold necessary to cover these expenses, minimizing the Trust's exposure to assets other than gold. This operational model results in zero cash flow from operations.

What is the relationship between the Trust's shares and the price of gold?

The investment objective of the Trust is for its shares to reflect the performance of the price of gold bullion, less the Trust's expenses. The value of the shares is directly tied to the market value of the gold held by the Trust. Investors should be aware that the ongoing expenses will gradually reduce the amount of gold represented by each share over time, even if the gold price is stable.

GLD 10-Q Quarterly Report Q1 FY2006 — Revenue, Net Income, EPS

Summary

SPDR Gold Trust (GLD) reports its financial condition for the period ending December 31, 2005. The Trust's primary asset is its investment in gold, which saw significant market value appreciation from $3,156,223,000 on September 30, 2005, to $4,087,091,000 on December 31, 2005. This increase in gold value is reflected in a substantial unrealized gain of $537,369,000 as of December 31, 2005, up from $245,610,000 at the end of the prior quarter. Despite the growth in its gold holdings, the Trust reported a net loss of $3,230,000 for the three months ended December 31, 2005, largely due to expenses such as custody fees, trustee fees, and sponsor fees, which totaled $3,477,000 for the quarter. For investors, the key takeaway is the Trust's direct correlation to the price of gold. The substantial increase in the market value of its gold holdings, driven by a rising gold price, is the primary factor influencing the Trust's Net Asset Value (NAV). However, the ongoing operational expenses lead to a net loss on the income statement, which, while impacting the Trust's overall deficit, is a structural aspect of the Trust's operation rather than an indicator of underperformance in its underlying asset. Investors should focus on the growth in gold value and understand that the Trust's objective is to track the price of gold bullion minus expenses.

Key Highlights

1The market value of the Trust's gold holdings increased significantly, rising from $3,156,223,000 to $4,087,091,000 between September 30, 2005, and December 31, 2005.
2Unrealized gains on gold holdings grew substantially to $537,369,000 as of December 31, 2005, up from $245,610,000 on September 30, 2005.
3The Trust experienced a net loss of $3,230,000 for the three months ended December 31, 2005, primarily due to operational expenses totaling $3,477,000.
4Total liabilities remained very low, at $1,376,000 as of December 31, 2005, indicating minimal debt.
5The number of outstanding redeemable shares increased from 66,900,000 to 85,000,000 between September 30, 2005, and December 31, 2005, reflecting continued investor demand.
6The Trust's structure aims to track the price of gold bullion, with its value directly linked to the market performance of gold.
7The Trust reported zero cash flow from operations, as gold sales to cover expenses are directly matched by cash expenditures.

SPDR GOLD TRUST Quarterly Report for Q1 Ended Dec 31, 2005

Summary

Key Highlights

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