GraniteShares Gold Trust 10-Q

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations This information should be read in conjunction with the financial statements and notes to financial statements included in Item 1 of Part I of this Form 10-Q. The discussion and analysis that follows may contain statements that relate to future events or future performance. In some cases, such forward-looking statements can be identified by terminology such as “may,” “should,” “could,” “expect,” “plan,” “anticipate,” “believe,” “estimate,” “predict,” “potential” or the negative of these terms or other comparable terminology. Except as required by applicable disclosure laws, neither the Sponsor, nor any other person assumes responsibility for the accuracy or completeness of any forward-looking statements. Neither the Trust nor the Sponsor is under a duty to update any of the forward-looking statements to conform such statements to actual results or to a change in the Sponsor’s expectations or predictions. Introduction The Trust is a common law trust, formed under the laws of the state of New York on August 24, 2017. The Trust is not managed like a corporation or an active investment vehicle. It does not have any officers, directors, or employees and is administered by the Trustee pursuant to the Trust Agreement. The Trust is not registered as an investment company under the Investment Company Act of 1940 and is not required to register under such act. It does not hold or trade in commodity futures contracts, nor is it a commodity pool, or subject to regulation as a commodity pool operator or a commodity trading adviser in connection with issuing Shares. The Trust holds gold and is expected to issue Baskets in exchange for deposits of gold, and to distribute gold in connection with redemptions of Baskets. Shares issued by the Trust represent units of undivided beneficial interest in and ownership of the Trust. The investment objective of the Trust is for the Shares to reflect the performance of the price of gold, less the Trust’s expenses. The Sponsor believes that, for many investors, the Shares will represent a cost-effective investment relative to traditional means of investing in gold. The Trust issues and redeems Shares only with Authorized Participants in exchange for gold and only in aggregations of 50,000 Shares or integral multiples thereof. A list of current Authorized Participants is available from the Sponsor or the Trustee. Shares of the Trust trade on the New York Stock Exchange (the “NYSE”) Arca under the symbol “BAR”. 11 Valuation of Gold; Computation of Net Asset Value On each business day, as soon as practicable after 4:00 p.m. (New York time), the Trustee evaluates the gold held by the Trust and determines the net asset value of the Trust and the NAV. The Trustee values the gold held by the Trust using that day’s LBMA Gold Price PM. If there is no announced LBMA Gold Price PM on a business day, the Trustee is authorized to use that day’s LBMA Gold Price AM. Having valued the gold held by the Trust, the Trustee then subtracts all accrued fees, expenses and other liabilities of the Trust from the value of the gold and other assets of the Trust. The result is the net asset value of the Trust. The Trustee computes the NAV by dividing the net asset value of the Trust by the number of Shares outstanding on the date the computation is made. Liquidity and Capital Resources The Trust is not aware of any trends, demands, commitments, events or uncertainties that are reasonably likely to result in material changes to its liquidity needs. In exchange for the Sponsor’s Fee, the Sponsor has agreed to assume most of the expenses incurred by the Trust. As a result, the only ordinary expense of the Trust during the period covered by this report was the Sponsor’s Fee. The 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. On September 30, 2024 the Trust did not have any cash balances. Off-Balance Sheet Arrangements The Trust has no off-balance sheet arrangements. Critical Accounting Policies The 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 policies. Below, the Trust describes the valuation of gold bullion, a critical accounting policy that the Trust believes is important to understanding its results of operations and financial position. In addition, please refer to Note 2 to the financial statements included in this report for further discussion of the Trust’s accounting policies. Results of Operations The Quarter Ended September 30, 2024 The Trust’s net asset value increased from $790,994,009 on June 30, 2024 to $879,107,605 on September 30, 2024, a 11.14% increase. The Trust’s number of shares outstanding decreased from 34,350,000 to 33,850,000 over this period. The net 500,000 shares decrease was a result of 6 creation orders and 16 redemption orders (50,000 shares per creation and redemption). The Trust’s net asset value was positively impacted by the change in the price of gold, which increased 12.83% from $2,330.90 on June 30, 2024 to $2,629.95 on September 30, 2024. The 12.77% increase in the Trust’s net asset value per share, from $23.03 on June 30, 2024, to $25.97 on September 30, 2024 is directly related to the 12.83% increase in the price of gold. The Trust’s net asset value per share increased slightly less than the price of gold on a percentage basis due to the Sponsor’s fees, which were $366,604 for the quarter, or 0.1749% of the Trust’s average weighted net assets of $830,592,005 during the quarter. The net asset value per share of $26.31 on September 26, 2024, was the highest during the quarter, compared with a low during the quarter of $23.01 on July 01, 2024. Net increase in net assets resulting from operations for the quarter ended September 30, 2024, was $100,010,521, resulting from an unrealized gain on investment in gold bullion of $93,978,695, increased by a gain of $6,398,430 on metal sold to cover redemption orders and Sponsor’s fees but increased by the Sponsor’s fees of $366,604. Other than the Sponsor’s fees the Trust had no expenses during the quarter. 12 Item 3. Quantitative and Qualitative Disclosures About Market Risk Not applicable.