How does SPDR Gold Trust (GLD) manage its expenses?

GLD pays its expenses by selling gold. The Trust aims to sell the minimum amount of gold necessary to cover these costs, which results in no reported operating cash flow and zero cash balance at the end of reporting periods. This strategy is designed to ensure the Trust primarily holds gold.

What is the difference between the cost and market value of GLD's gold holdings?

As of June 30, 2011, the Trust's gold holdings were valued at cost at approximately $37.79 billion, while their market value was $58.53 billion. This difference represents a significant unrealized gain of over $20.74 billion, reflecting the appreciation of gold prices since the gold was acquired by the Trust.

How are creations and redemptions of GLD shares handled?

GLD creates and redeems shares only in large blocks called 'Baskets'. New shares are issued in exchange for deposits of physical gold, and gold is distributed when shares are redeemed. This process ensures that the Trust's assets (primarily gold) closely track the value of its outstanding shares.

What are the main drivers of GLD's reported gains?

The significant gains reported by GLD are primarily driven by the appreciation in the market value of its gold holdings and, more specifically, by the gains realized when gold is distributed for the redemption of shares. The report highlights substantial gains on gold distributed for redemptions during the nine months ended June 30, 2011.

GLD 10-Q Quarterly Report Q3 FY2011 — Revenue, Net Income, EPS

Summary

SPDR Gold Trust (GLD) reported its financial results for the period ending June 29, 2011. The Trust holds physical gold, and its performance is directly tied to the price of gold bullion. During the nine months ended June 30, 2011, the Trust saw a significant increase in its net gain from operations, driven primarily by substantial gains on gold distributed for share redemptions. The market value of the Trust's gold holdings increased, reflecting a rising gold price during the period. Investors should note that GLD does not generate operating cash flow as its expenses are paid by selling gold. The Trust's financial statements highlight the impact of gold price fluctuations on its assets and net gains. The report also details the fees associated with the Trust's management, including those paid to the Sponsor, Trustee, and Marketing Agent, and notes that fee reductions were in effect to limit the impact of expenses on the Net Asset Value (NAV).

Financial Highlights

17 data points

Beta

Net Income

$1.16B

EPS (Diluted)

$2.89

Total Assets

$37.79B

Cash & Equivalents

$0.00

Free Cash Flow

$0.00

Financial Statements

Beta

Gross Profit	$20.65M
Operating Expenses	$58.52M
Net Income	$1.16B
EPS (Basic)	$2.89
Shares Outstanding (Basic)	399.74M

Key Highlights

1Total gain on gold for the nine months ended June 30, 2011, was $4.09 billion, a significant increase compared to $646.3 million in the prior year period.
2Net gain from operations for the nine months ended June 30, 2011, was $3.92 billion, up from $520.8 million in the comparable prior year period.
3The market value of the Trust's gold holdings stood at $58.53 billion as of June 30, 2011, compared to $54.65 billion as of September 30, 2010, reflecting an increase in gold prices.
4The Trust had no net cash flow from operating activities, as expenses are paid by selling gold, a model designed to minimize holdings of assets other than gold.
5Shares outstanding decreased from 429.2 million at September 30, 2010, to 398.6 million at June 30, 2011.
6The average cost of gold held by the Trust was $37.79 billion as of June 30, 2011, while its market value was $58.53 billion, indicating a substantial unrealized gain of over $20.74 billion.
7Fees paid to the Sponsor and Marketing Agent were reduced during the period to manage Trust expenses.

SPDR GOLD TRUST Quarterly Report for Q3 Ended Jun 30, 2011

Summary

Financial Highlights

Key Highlights

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