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under Code section 401(a) (“Tax Qualified Account”) is treated as a taxable distribution from the account to the owner |
of the IRA, or to the participant for whom the Tax Qualified Account is maintained, of an amount equal to the cost to the account |
of acquiring the collectible. The term “collectible” is defined to include, with certain exceptions, “any metal |
or gem”. The IRS has issued several private letter rulings to the effect that a purchase by an IRA, or by a participant-directed |
account under a Code section 401(a) plan, of publicly-traded shares in a trust holding gold will not be treated |
as resulting in a taxable distribution to the IRA owner or Tax Qualified Account participant under Code section 408(m). However |
the private letter rulings provide that, if any of the Shares so purchased are distributed from the IRA or Tax Qualified Account |
to the IRA owner or Tax Qualified Account participant, or if any gold is received by such IRA or Tax Qualified Account |
upon the redemption of any of the Shares purchased by it, the Shares or gold so distributed will be subject |
to federal income tax in the year of distribution, to the extent provided under the applicable provisions of Code sections 408(d), |
408(m) or 402. Accordingly, potential IRA or Tax Qualified Account investors are urged to consult with their own professional |
advisors concerning the treatment of an investment in Shares under Code section 408(m). 23 Item 1A. Risk Factors Shareholders should consider carefully the risks described below |
before making an investment decision. Shareholders should also refer to the other information included in this report, including |
the Trust’s financial statements and the related notes. RISKS RELATED TO GOLD The price of gold may be affected by the sale of ETVs tracking |
the gold markets. To the extent existing exchange traded vehicles (“ETVs”) |
tracking the gold markets represent a significant proportion of demand for physical gold bullion, large redemptions of the securities |
of these ETVs could negatively affect physical gold bullion prices and the price and NAV of the Shares. Crises may motivate large-scale sales of gold which could |
decrease the price of gold and adversely affect an investment in the Shares. The possibility of large-scale distress sales of gold in times |
of crisis may have a short-term negative impact on the price of gold and adversely affect an investment in the Shares. For example, |
the 2008 financial credit crisis resulted in significantly depressed prices of gold largely due to forced sales and deleveraging |
from institutional investors such as hedge funds and pension funds. Crises in the future may impair gold’s price performance |
which would, in turn, adversely affect an investment in the Shares. Several factors may have the effect of causing a decline |
in the prices of gold and a corresponding decline in the price of Shares. Among them: ● A significant increase in gold hedging activity by |
gold producers. Should there be an increase in the level of hedge activity of gold producing companies, it could cause a decline |
in world gold prices, adversely affecting the price of the Shares. ● A significant change in the attitude of speculators, |
investors and central banks towards gold. Should the speculative community take a negative view towards gold or central banking |
authorities determine to sell national gold reserves, either event could cause a decline in world gold prices, negatively impacting |
the price of the Shares. ● A widening of interest rate differentials between the |
cost of money and the cost of gold could negatively affect the price of gold which, in turn, could negatively affect the price |
of the Shares. ● A combination of rising money interest rates and a |
continuation of the current low cost of borrowing gold could improve the economics of selling gold forward. This could result |
in an increase in hedging by gold mining companies and short selling by speculative interests, which would negatively affect the |
price of gold. Under such circumstances, the price of the Shares would be similarly affected. 24 The value of the Shares relates directly to the value of |
the gold held by the Trust and fluctuations in the price of gold could materially adversely affect an investment in the Shares. The Shares are designed to mirror as closely as possible the |
performance of the price of gold bullion, and the value of the Shares relates directly to the value of the gold held by the Trust, |
less the Trust’s liabilities (including estimated accrued but unpaid expenses). The price of gold has fluctuated widely over |
the past several years. Several factors may affect the price of gold, includin ● Global gold supply and demand, which is influenced by |
such factors as forward selling by gold producers, purchases made by gold producers to unwind gold hedge positions, central bank |
purchases and sales, and production and cost levels in major gold-producing countries such as China, Australia, Russia and |
the United States; ● Investors’ expectations with respect to the rate |
of inflation; ● Currency exchange rates; ● Interest rates; ● Investment and trading activities of hedge funds and |
commodity funds; and ● Global or regional political, economic or financial events |
and situations. ● A significant change in investor interest, including in response to online campaigns |
or other activities specifically targeting investments in gold. In addition, investors should be aware |
that there is no assurance that gold will maintain its long-term value in terms of purchasing power in the future. In the event |
that the price of gold declines, the Sponsor expects the value of an investment in the Shares to decline proportionately. RISKS RELATED TO THE SHARES The sale of the Trust’s gold to pay expenses |
not assumed by the Sponsor at a time of low gold prices could adversely affect the value of the Shares. The Trustee sells gold held by the Trust to pay |
Trust expenses not assumed by the Sponsor on an as-needed basis irrespective of then-current gold prices. The Trust is not actively |
managed and no attempt will be made to buy or sell gold to protect against or to take advantage of fluctuations in the price of |
gold. Consequently, the Trust’s gold may be sold at a time when the gold price is low, resulting in a negative effect on |
the value of the Shares. The value of the Shares will be adversely affected |
if the Trust is required to indemnify the Sponsor or the Trustee under the Trust Agreement. Under the Trust Agreement, each of the Sponsor and |
the Trustee has a right to be indemnified from the Trust for any liability or expense it incurs without gross negligence, bad faith, |
willful misconduct, willful malfeasance or reckless disregard on its part. That means the Sponsor or the Trustee may require the |
assets of the Trust to be sold in order to cover losses or liability suffered by it. Any sale of that kind would reduce the NAV |
of the Trust and the value of the Shares. The Shares may trade at a price which is at, |
above or below the NAV per Share and any discount or premium in the trading price relative to the NAV per Share may widen as a |
result of non-concurrent trading hours between the NYSE Arca and London, Zurich and COMEX. The Shares may trade at, above or below the NAV |
per Share. The NAV per Share fluctuates with changes in the market value of the Trust’s assets. The trading price of the |
Shares fluctuates in accordance with changes in the NAV per Share as well as market supply and demand. The amount of the discount |
or premium in the trading price relative to the NAV per Share may be influenced by non-concurrent trading hours between the NYSE |
Arca and the major gold markets. While the Shares trade on the NYSE Arca until 4:00 p.m. New York time, liquidity in the market |
for gold is reduced after the close of the major world gold markets, including London, Zurich and the COMEX. As a result, during |
this time, trading spreads, and the resulting premium or discount on the Shares, may widen. A possible “short squeeze” due to a sudden |
increase in demand of Shares that largely exceeds supply may lead to price volatility in the Shares. Investors may purchase Shares to hedge existing gold |
exposure or to speculate on the price of gold. Speculation on the price of gold may involve long and short exposures. To the extent |
aggregate short exposure exceeds the number of Shares available for purchase (for example, in the event that large redemption requests |
by Authorized Participants dramatically affect Share liquidity), investors with short exposure may have to pay a premium to repurchase |
Shares for delivery to Share lenders. Those repurchases may in turn, dramatically increase the price of the Shares until additional |
Shares are created through the creation process. This is often referred to as a “short squeeze.” A short squeeze could |
lead to volatile price movements in Shares that are not directly correlated to the price of gold. 25 Purchasing activity in the gold market |
associated with the purchase of Baskets from the Trust may cause a temporary increase in the price of gold. This increase may adversely |
affect an investment in the Shares. Purchasing activity associated with acquiring |
the gold required for deposit into the Trust in connection with the creation of Baskets may temporarily increase the market price |
of gold, which will result in higher prices for the Shares. Temporary increases in the market price of gold may also occur as a |
result of the purchasing activity of other market participants. Other gold market participants may attempt to benefit from an increase |
in the market price of gold that may result from increased purchasing activity of gold connected with the issuance of Baskets. Consequently, |
the market price of gold may decline immediately after Baskets are created. If the price of gold declines, the trading price |
of the Shares may also decline. The Shares and their value could decrease |
if unanticipated operational or trading problems arise. There may be unanticipated problems or |
issues with respect to the mechanics of the Trust’s operations and the trading of the Shares that could have a material adverse |
effect on an investment in the Shares. In addition, although the Trust is not actively “managed” by traditional methods, |
to the extent that unanticipated operational or trading problems or issues arise, the Sponsor’s past experience and qualifications |
may not be suitable for solving these problems or issues. Discrepancies, disruptions or unreliability |
of the LBMA PM Gold Price could impact the value of the Trust’s gold and the market price of the Shares. The Trustee values the Trust’s gold pursuant to the LBMA |
PM Gold Price. In the event that the LBMA PM Gold Price proves to be an inaccurate benchmark, or the LBMA PM Gold Price varies |
materially from the prices determined by other mechanisms for valuing gold, the value of the Trust’s gold and the market |
price of the Shares could be adversely impacted. Any future developments in the LBMA PM Gold Price, to the extent it has a material |
impact on the LBMA PM Gold Price, could adversely impact the value of the Trust’s gold and the market price of the Shares. |
It is possible that electronic failures or other unanticipated events may occur that could result in delays in the announcement |
of, or the inability of the benchmark to produce, the LBMA PM Gold Price on any given date. Furthermore, any actual or perceived |
disruptions that result in the perception that the LBMA PM Gold Price is vulnerable to actual or attempted manipulation could adversely |
affect the behavior of market participants, which may have an effect on the price of gold. If the LBMA PM Gold Price is unreliable |
for any reason, the price of gold and the market price for the Shares may decline or be subject to greater volatility. If the process of creation and redemption |
of Baskets encounters any unanticipated difficulties, the possibility for arbitrage transactions intended to keep the price of |
the Shares closely linked to the price of gold may not exist and, as a result, the price of the Shares may fall. If the processes of creation and redemption of Shares (which |
depend on timely transfers of gold to and by the Custodian) encounter any unanticipated difficulties, potential market participants |
who would otherwise be willing to purchase or redeem Baskets to take advantage of any arbitrage opportunity arising from discrepancies |
between the price of the Shares and the price of the underlying gold may not take the risk that, as a result of those difficulties, |
they may not be able to realize the profit they expect. If this is the case, the liquidity of Shares may decline and the price |
Subsets and Splits