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Item 7. Management’s Discussion and Analysis

2021-08-13 compared with 2020-08-24 · 93 added, 97 removed, 32 unchanged (86% of the section changed)

Management’s Discussion and Analysis of Financial Condition and Results of Operations

information should be read in conjunction with the financial statements and notes to the financial statements included with this

information should be read in conjunction with the financial statements and notes to the financial statements included with this report.

The discussion and analysis that follows may contain statements that relate to future events or future performance.

some cases, such forward-looking statements can be identified by terminology such as “may,” “should,”

“expect,” “plan,” “anticipate,” “believe,” “estimate,” “predict,”

“potential” or the negative of these terms or other comparable terminology.

We remind readers that forward-looking

statements are merely predictions and therefore inherently subject to uncertainties and other factors and involve known and unknown

risks that could cause the actual results, performance, levels of activity, or our achievements, or industry results, to be materially

different from any future results, performance, levels of activity, or our achievements expressed or implied by such forward-looking

Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the

The Trust undertakes no obligation to publicly release any revisions to these forward-looking statements to reflect

events or circumstances after the date hereof or to reflect the occurrence of unanticipated events.

In some cases, such

forward-looking statements can be identified by terminology such as “may,” “should,” “expect,” “plan,”

“anticipate,” “believe,” “estimate,” “predict,” “potential” or the negative

of these terms or other comparable terminology.

We remind readers that forward-looking statements are merely predictions and therefore

inherently subject to uncertainties and other factors and involve known and unknown risks that could cause the actual results, performance,

levels of activity, or our achievements, or industry results, to be materially different from any future results, performance, levels

of activity, or our achievements expressed or implied by such forward-looking statements.

Readers are cautioned not to place undue reliance

on these forward-looking statements, which speak only as of the date hereof.

The Trust undertakes no obligation to publicly release any

revisions to these forward-looking statements to reflect events or circumstances after the date hereof or to reflect the occurrence of

unanticipated events.

Introduction.

GraniteShares Gold Trust (the “Trust”) is a trust formed under the laws of the State of New York.

The Trust does not

have any officers, directors, or employees, and is administered by The Bank of New York Mellon (the “Trustee”) acting

as trustee pursuant to the Depositary Trust Agreement (the “Trust Agreement”) between the Trustee and GraniteShares

LLC, the sponsor of the Trust (the “Sponsor”).

The Trust issues Shares representing fractional undivided beneficial

interests in its net assets.

The assets of the Trust consist of gold bullion held by a custodian as an agent of the Trust and

responsible only to the Trustee.

Trust is a passive investment vehicle and the objective of the Trust is for the value of each Share to approximately reflect,

at any given time, the price of the gold bullion owned by the Trust, less the Trust’s liabilities (anticipated to be principally

for accrued operating expenses), divided by the number of outstanding Shares.

The Trust does not engage in any activities designed

to obtain a profit from, or ameliorate losses caused by, changes in the price of gold.

Trust issues and redeems Shares only in exchange for gold, only in aggregations of 50,000 or integral multiples thereof (each,

a “Basket”), and only in transactions with registered broker-dealers or other securities market participants not required

to register as broker-dealers, such as a bank or other financial institution, that (1) are participants in DTC and (2) have previously

entered into an agreement with the Trust governing the terms and conditions of such issuance (such dealers, the “Authorized

Participants”).

As of the date of this annual report the Authorized Participants that have signed an Authorized Participant

Agreement with the J.P.

Morgan Securities Inc., Merrill Lynch Professional Clearing Corp., and Virtu Financial BD, LLC.

The Trust does not have

any officers, directors, or employees, and is administered by The Bank of New York Mellon (the “Trustee”) acting as trustee

pursuant to the Depositary Trust Agreement (the “Trust Agreement”) between the Trustee and GraniteShares LLC, the sponsor

of the Trust (the “Sponsor”).

The Trust issues Shares representing fractional undivided beneficial interests in its net assets.

The assets of the Trust consist of gold bullion held by a custodian as an agent of the Trust and responsible only to the Trustee.

Trust is a passive investment vehicle and the objective of the Trust is for the value of each Share to approximately reflect, at any

given time, the price of the gold bullion owned by the Trust, less the Trust’s liabilities (anticipated to be principally for accrued

operating expenses), divided by the number of outstanding Shares.

The Trust does not engage in any activities designed to obtain a profit

from, or ameliorate losses caused by, changes in the price of gold.

Trust issues and redeems Shares only in exchange for gold, only in aggregations of 50,000 or integral multiples thereof (each, a “Basket”),

and only in transactions with registered broker-dealers or other securities market participants not required to register as broker-dealers,

such as a bank or other financial institution, that (1) are participants in DTC and (2) have previously entered into an agreement with

the Trust governing the terms and conditions of such issuance (such dealers, the “Authorized Participants”).

As of the date

of this annual report the Authorized Participants that have signed an Authorized Participant Agreement with the J.P.

Morgan Securities

Inc., Merrill Lynch Professional Clearing Corp., and Virtu Financial BD, LLC.

of the Trust trade on the NYSE Arca under the symbol “BAR”.

in the Shares does not insulate the investor from certain risks, including price volatility.

The following graph illustrates the

movement in the net asset value (“NAV”) of the Shares against the corresponding gold price (per 1/100 of an oz.

gold) since inception:

The following graph illustrates the movement

in the net asset value (“NAV”) of the Shares against the corresponding gold price (per 1/100 of an oz.

of gold) since inception:

per Share (1) vs.

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See Note 1 to the Financial Statements.

divergence of the NAV per Share from the gold price over time reflects the cumulative effect of the Trust expenses that arise

if an investment had been held since inception.

divergence of the NAV per Share from the gold price over time reflects the cumulative effect of the Trust expenses that arise if an investment

had been held since inception.

Accounting Policy

financial statements and accompanying notes are prepared in accordance with accounting principles generally accepted in the United

States of America.

The preparation of these financial statements relies on estimates and assumptions that impact the Trust’s

financial position and results of operations.

These estimates and assumptions affect the Trust’s application of accounting

Below we describe the valuation of gold bullion, a critical accounting policy that we believe is important to understanding

our results of operations and financial position.

In addition, please refer to Note 2 to the Financial Statements for further

discussion of our accounting policies.

financial statements and accompanying notes are prepared in accordance with accounting principles generally accepted in the United States

The preparation of these financial statements relies on estimates and assumptions that impact the Trust’s financial

position and results of operations.

These estimates and assumptions affect the Trust’s application of accounting policies.

we describe the valuation of gold bullion, a critical accounting policy that we believe is important to understanding our results of

operations and financial position.

In addition, please refer to Note 2 to the Financial Statements for further discussion of our accounting

is held by the Custodian on behalf of the Trust.

Gold is recorded at fair value.

The cost of gold is determined according to the

average cost method and the fair value is based on the LBMA PM Gold Price.

Realized gains and losses on transfers of gold, or

gold distributed for the redemption of Shares, are calculated on a trade date basis as the difference between the fair value and

cost of gold transferred.

June 30, 2020

The cost of gold is determined according to the average

cost method and the fair value is based on the LBMA PM Gold Price.

Realized gains and losses on transfers of gold, or gold distributed

for the redemption of Shares, are calculated on a trade date basis as the difference between the fair value and cost of gold transferred.

(Amounts in 000’s of US$)

Investment in gold - cost

Unrealized gain / (loss) on investment in gold

Investment in gold - fair value

the Custody Agreements, the Trustee, the Sponsor and the Sponsor’s auditors and inspectors may, only up to twice a year,

visit the premises of the Custodian for the purpose of examining the Trust’s gold and certain related records maintained

by the Custodian.

Unrealized gain /

(loss) on investment in gold

Investment in gold

the Custody Agreements, the Trustee, the Sponsor and the Sponsor’s auditors and inspectors may, only up to twice a year, visit

the premises of the Custodian for the purpose of examining the Trust’s gold and certain related records maintained by the Custodian.

Sponsor has exercised its right to visit the Custodian in order to examine the gold and the records maintained by them.

recent inspection by Inspectorate International Limited, a leading commodity inspection and testing company retained by the Sponsor,

of the Custodian was conducted as of June 30, 2020.

Trust is not aware of any trends, demands, conditions or events that are reasonably likely to result in material changes to its

liquidity needs.

In exchange for a fee (the “Sponsor’s Fee”), the Sponsor has agreed to assume most of the expenses

incurred by the Trust.

As a result, the only expense of the Trust during the period covered by this report was the Sponsor’s

The Trust’s only source of liquidity is its transfers and sales of gold.

The most recent

inspection by Inspectorate International Limited, a leading commodity inspection and testing company retained by the Sponsor, of the

Custodian was conducted as of July 08, 2021.

Trust is not aware of any trends, demands, conditions or events that are reasonably likely to result in material changes to its liquidity

In exchange for a fee (the “Sponsor’s Fee”), the Sponsor has agreed to assume most of the expenses incurred

by the Trust.

As a result, the only expense of the Trust during the period covered by this report was the Sponsor’s Fee.

only source of liquidity is its transfers and sales of gold.

Trustee will, at the direction of the Sponsor or in its own discretion, sell the Trust’s gold as necessary to pay the Trust’s

expenses not otherwise assumed by the Sponsor.

The Trustee will not sell gold to pay the Sponsor’s Fee but will pay the

Sponsor’s Fee through in-kind transfers of gold to the Sponsor.

The Trustee will not sell gold to pay the Sponsor’s Fee but will pay the Sponsor’s

Fee through in-kind transfers of gold to the Sponsor.

At June 30, 2021 the Trust did not have any cash balances.

of Financial Results

June 30, 2020

(Amounts in 000’s of US$ except per share data)

(Amounts in 000’s of US$ except per

Total gain / (loss) on gold

Change in net assets from operations

Net increase (decrease) in net assets per share

Net increase (decrease) in net assets per

year ended June 30, 2021

Trust’s NAV increased from $545,511,107 on June 30, 2019 to $1,041,316,068 on June 30, 2020, a 91% increase for the

The increase in the Trust’s NAV resulted primarily from an increase in outstanding Shares, which rose from 38,850,000

Shares on June 30, 2019 to 59,200,000 Shares on June 30, 2020, a result of 23,500,000 Shares (470 Baskets) being created and 3,150,000

Shares (63 Baskets) being redeemed during that period.

Trust’s NAV decreased from $1,041,316,068 on June 30, 2020 to 1,009,450,266 on June 30, 2021, a 3.1% decrease for the year.

decrease in the Trust’s NAV resulted primarily from a reduction in outstanding Shares from 59,200,000 Shares on June 30, 2020 to

57,650,000 Shares on June 30, 2021, a result of 16,600,000 Shares (332 Baskets) being created and 18,150,000 Shares (363 Baskets) being

redeemed during that period.

NAV per Share decreased 0.46% from $17.59 on June 30, 2020 to $17.51 on June 30, 2021.

During that period the gold price decreased 0.28%

from $1,768.10 on June 28, 2020 to $1,763.15 on June 28, 2021.

The Trust’s NAV per Share decreased slightly more than the price

per ounce of gold on a percentage basis due to the Sponsor’s Fee, which was $2,012,108 for the fiscal year, or 0.1749% of the Trust’s

assets on an annualized basis.

year ended June 30, 2020

Trust’s NAV increased from $545,511,107 on June 30, 2019 to $1,041,316,068 on June 30, 2020, a 91% increase for the year.

in the Trust’s NAV resulted primarily from an increase in outstanding Shares, which rose from 38,850,000 Shares on June 30, 2019

to 59,200,000 Shares on June 30, 2020, a result of 23,500,000 Shares (470 Baskets) being created and 3,150,000 Shares (63 Baskets) being

redeemed during that period.

NAV per Share increased 25.28% from $14.04 on June 30, 2019 to $17.59 on June 30, 2020.

1 unchanged sentence

from $1,409.00 on June 30, 2019 to $1,768.10 on June 28, 2020.

The Trust’s NAV per Share increased slightly less

than the price per ounce of gold on a percentage basis due to the Sponsor’s Fee, which was $1,193,277 for the fiscal year,

or 0.1749% of the Trust’s assets on an annualized basis.

The Trust’s NAV per Share increased slightly less than the price

per ounce of gold on a percentage basis due to the Sponsor’s Fee, which was $1,193,277 for the fiscal year, or 0.1749% of the Trust’s

assets on an annualized basis.

year ended June 30, 2019

Trust’s NAV increased from $250,925,048 on June 30, 2018 to $545,511,107 on June 30, 2019, a 117% increase for the year.

The increase in the Trust’s NAV resulted primarily from an increase in outstanding Shares, which rose, on a post stock split

basis (see Note 1 to the Financial Statements), from 20,100,000 Shares on June 30, 2018 to 38,850,000 Shares on June 30, 2019,

a result of 22,100,000 Shares (442 Baskets) being created and 3,350,000 Shares (67 Baskets) being redeemed during that period.

a post stock split basis (see Note 1 to the Financial Statements), the NAV per Share increased 12.50% from $12.48 on June 30,

2018 to $14.04 on June 30, 2019.

During that period the gold price increased 12.68% from $1,250.45 on June 30, 2018 to $1,409.00

on June 28, 2019.

The Trust’s NAV per Share increased slightly less than the price per ounce of gold on a percentage basis

due to the Sponsor’s Fee, which was $666,919 for the fiscal year, or 0.18% of the Trust’s assets on an annualized

The Sponsor’s Fee was reduced from 0.20% to 0.1749% on October 5, 2018 (see Note 2.2 in the Financial Statements)

year ended June 30, 2018

Trust’s NAV increased from $2,578,000 on August 24, 2017 to $250,925,048 on June 30, 2018, a 9,633.32% increase for the

The increase in the Trust’s NAV resulted primarily from an increase in outstanding Shares, which rose , on a post

stock split basis (see Note 1 to the Financial Statements) from 200,000 Shares on August 24, 2017 to 20,100,000 Shares on June

30, 2018, a result of 19,900,000 Shares (398 Baskets) being created and 0 Shares being redeemed during that period.

a post stock split basis (see Note 1 to the Financial Statements), the NAV per Share decreased 3.15% from $12.89 on August 24,

2017 to $12.48 on June 30, 2018.

During that period the gold price decreased 2.99% from $1,289.00 on August 24, 2017 to $1,250.45

in the Trust’s NAV resulted primarily from an increase in outstanding Shares, which rose, on a post stock split basis (see Note

1 to the Financial Statements), from 20,100,000 Shares on June 30, 2018 to 38,850,000 Shares on June 30, 2019, a result of 22,100,000

Shares (442 Baskets) being created and 3,350,000 Shares (67 Baskets) being redeemed during that period.

a post stock split basis (see Note 1 to the Financial Statements), the NAV per Share increased 12.50% from $12.48 on June 30, 2018 to

$14.04 on June 30, 2019.

The Trust’s NAV per Share decreased slightly more than the price per ounce of gold on a percentage basis

due to the Sponsor’s Fee, which was $44,776 for the fiscal year, or 0.20% of the Trust’s assets on an annualized basis.

During that period the gold price increased 12.68% from $1,250.45 on June 30, 2018 to $1,409.00 on June 28,

The Trust’s NAV per Share increased slightly less than the price per ounce of gold on a percentage basis due to the Sponsor’s

Fee, which was $666,919 for the fiscal year, or 0.18% of the Trust’s assets on an annualized basis.

The Sponsor’s Fee was

reduced from 0.20% to 0.1749% on October 5, 2018 (see Note 2.2 in the Financial Statements)

Sheet Arrangements

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 7. Management’s Discussion and Analysis