World Gold Trust 10-K

Item 1. Business STRUCTURE The Trust The World Gold Trust (the “Trust”) was formed as a Delaware statutory trust on August 27, 2014. The Trust consists of multiple series (each, a “Fund” and collectively, the “Funds”). Each Fund issues common units of beneficial interest that represent units of fractional undivided beneficial interest in and ownership of such Fund. The term of the Trust and each Fund is perpetual (unless terminated earlier in certain circumstances). The Trust was organized in separate series as a Delaware statutory trust rather than as separate statutory trusts to achieve certain administrative and other efficiencies. The Trust is sponsored by WGC USA Asset Management Company, LLC (“WGCAM” or the “Sponsor”). The Funds The Trust has established six separate Funds of which one is operational at September 30, 2024. The accompanying financial statements relate to the Trust and the SPDR ® Gold MiniShares ® Trust (“GLDM”). GLDM commenced operations on June 26, 2018. GLDM’s investment objective is for its shares (the “Shares”) to reflect the performance of the price of gold bullion, less GLDM’s expenses. GLDM issues and redeems Shares from time to time in blocks of 100,000 Shares ("Creation Units") to institutional investors referred to as “Authorized Participants.” Creation Units are offered continuously at the net asset value (the “NAV”) for 100,000 Shares on the day that an order to create a Creation Unit is accepted by GLDM. Shares trade under the ticker symbol GLDM on the NYSE Arca, Inc. (the “NYSE Arca”). Authorized Participants and other investors may buy and sell the Shares in the secondary market. Authorized share capital is unlimited, and the par value of the Shares is $0.00. The principal offices of the Trust and the Funds are at c/o WGC USA Asset Management Company, LLC, 685 Third Avenue, Suite 2702, New York, New York 10017. The Sponsor The Sponsor is a Delaware limited liability company and was formed on August 1, 2014. WGCAM is wholly owned by WGC (US) Holdings, Inc. (“WGCUS”), a Delaware corporation. Under the Delaware Limited Liability Company Act and the governing documents of the Sponsor, WGCUS is not responsible for the debts, obligations and liabilities of the Sponsor solely by reason of being the sole member of the Sponsor. The Sponsor is responsible for establishing the Funds and for the registration of the shares of each Fund. The Sponsor generally oversees the performance of the Funds’ principal service providers but does not exercise day-to-day oversight over such service providers. The Sponsor maintains a public website at www.spdrgoldshares.com on behalf of the Funds, containing information about each of the Funds and their respective shares. The website is only provided here as a convenience to you, and the information contained on or connected to the Sponsor’s website is not considered part of this filing. The Trust’s annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and any amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Exchange Act are made available free of charge on the Sponsor’s website after they have been filed with or furnished to the Securities and Exchange Commission (the “SEC”). Additional information regarding the Trust may also be found on the SEC’s EDGAR database at www.sec.gov. 1 Table of Contents The Trustee Delaware Trust Company, a Delaware trust company with trust powers, serves as the trustee of the Trust (the “Trustee”). The Trustee’s duties and liabilities with respect to the offering of shares and the management of the Trust and GLDM are limited to its express obligations under the Fourth Amended and Restated Agreement and Declaration of Trust (“Declaration of Trust”), dated as of April 16, 2018 and amended on February 6, 2020 and December 1, 2023, between the Sponsor and the Trustee. The Administrator The administrator of the Funds, including GLDM, is The Bank of New York Mellon (“BNY” or the “Administrator”). The Administrator is generally responsible for the day-to-day administration and operation of the Funds, including the calculation of the Funds’ NAV and NAV per share. The Transfer Agent BNY also serves as GLDM’s transfer agent in connection with the creation and redemption of Shares and distribution disbursing agent. BNY receives and processes orders from Authorized Participants to create and redeem Shares and coordinates the processing of such orders with the Custodians and The Depository Trust Company (“DTC”). The Custodians ICBC Standard Bank Plc (“ICBC”) and JPMorgan Chase Bank, N.A. ("JPMorgan") are GLDM's custodians (each a “Custodian” and together, the "Custodians"). The Custodians are responsible for safekeeping GLDM's gold bullion, which includes the gold bullion bars delivered to GLDM by Authorized Participants in connection with the creation of Creation Units. The Custodians also facilitate the transfer of gold bullion into and out of GLDM through gold bullion accounts maintained for Authorized Participants. The Custodians are both market makers, clearers and approved weighers under the rules of the London Bullion Market Association (“LBMA”). Each Custodian maintains insurance in support of its custodial obligations under its respective allocated account agreement to help protect against the risk of loss for gold deposits. There can be no guarantee such insurance will be sufficient to cover all potential loss of gold deposits. The Marketing Agent The Marketing Agent is State Street Global Advisors Funds Distributors, LLC (the “Marketing Agent”). The Sponsor has entered into the Marketing Agent Agreement with the Marketing Agent to assist the Sponsor in marketing the Funds’ shares. The Marketing Agent is a registered broker-dealer with the SEC and is a member of FINRA. INVESTMENT OBJECTIVE The investment objective of GLDM is for the Shares to reflect the performance of the price of gold bullion, less GLDM’s expenses. The Shares trade on the NYSE Arca and provide institutional and retail investors with indirect access to the gold bullion market. The Shares may be bought and sold on the NYSE Arca like any other exchange-listed securities. The Sponsor expects that, for many investors, costs associated with buying and selling the Shares in the secondary market and the payment of GLDM’s ongoing expenses will be lower than the costs associated with buying and selling gold bullion and storing and insuring gold bullion in a traditional allocated gold bullion account. The Shares are also listed on the Mexican Stock Exchange (Bolsa Mexicana de Valores). GLDM’s NAV is the aggregate value of GLDM’s assets less its liabilities (which include estimated accrued but unpaid fees and expenses). The NAV is calculated based on the price of gold per ounce times the number of ounces of gold owned by GLDM. For purposes of calculating NAV, the number of ounces of gold owned by GLDM reflects the amount of gold delivered into (or out of) GLDM on a daily basis by Authorized Participants creating and redeeming Shares. To determine the NAV, the Administrator will value the gold bullion held by GLDM on the basis of the price of an ounce of gold determined by the IBA 3:00 PM auction process (“LBMA Gold Price PM”). If no LBMA Gold Price PM is made on a particular evaluation day or if the LBMA Gold Price PM has not been announced by 12:00 p.m. New York time on a particular evaluation day, the next most recent LBMA Gold Price (AM or PM) will be used to determine the NAV, unless the Sponsor determines that such price is inappropriate to use as the basis for such determination. If the Sponsor determines that such price is inappropriate to use, it shall identify an alternate basis for evaluation of the gold bullion held by GLDM. 2 Table of Contents OVERVIEW GLDM is a passive investment vehicle designed for the Shares to reflect the performance of the price of gold bullion, less GLDM’s expenses. GLDM’s gold bullion holdings are not managed and GLDM does not have any investment discretion. GLDM is not registered as an investment company under the Investment Company Act of 1940 and is not required to register under such act. GLDM will not hold or trade in commodity futures contracts regulated by the Commodity Exchange Act of 1936 (the “CEA”) as administered by the Commodity Futures Trading Commission (the “CFTC”). GLDM is not a commodity pool for purposes of the CEA, and none of the Sponsor, the Trustee or the Marketing Agent is subject to regulation as a commodity pool operator or a commodity trading advisor in connection with the Shares. GLDM holds only gold bullion. As such, the gold bullion held by GLDM will only be sold (1) on an as-needed basis to pay GLDM’s expenses, (2) in the event GLDM terminates and liquidates its assets, or (3) as otherwise required by law or regulation. The sale of gold bullion by GLDM is a taxable event to shareholders. Sales of Gold The Administrator sells GLDM’s gold as necessary to pay its expenses. As a result, the amount of gold sold will vary from time to time depending on the level of expenses and the market price of gold. Unless otherwise directed by the Sponsor, the Administrator sells gold to one of the Custodians at the current or next LBMA Gold Price PM, depending on the time of day the sale order is received by the Custodian. Neither the Administrator nor the Sponsor is liable for depreciation or loss incurred by reason of any sale. Any cash held by the Administrator on behalf of the Funds does not bear any interest. The Administrator may also sell GLDM’s gold if the Sponsor notifies the Administrator that the sale of gold is required by applicable law or regulation or in connection with the termination and liquidation of GLDM. The Administrator will not be liable or responsible in any way for depreciation or loss incurred by reason of any sale of gold directed by the Sponsor. Any property received by GLDM other than gold, cash or an amount receivable in cash (such as, for example, an insurance claim) will be promptly sold or otherwise disposed of by the Administrator. Gold Price Information Investors may obtain gold pricing information on a 24-hour basis based on the spot price for an ounce of gold from various financial information service providers. Current spot prices are also generally available with bid/ask spreads from gold bullion dealers. In addition, the Sponsor’s website provides ongoing pricing information for gold spot prices and the Shares. Market prices for the Shares are available from a variety of sources including brokerage firms, information websites and other information service providers. The NAV of GLDM is published by the Sponsor on each day that the NYSE Arca is open for regular trading and is posted on the Sponsor’s website at www.spdrgoldshares.com. 3 Table of Contents THE GOLD INDUSTRY Gold Supply and Demand Gold is a physical asset that is accumulated rather than consumed. As a result, virtually all the gold that has ever been mined still exists today in one form or another. The following table is a summary of the world gold supply and demand for the past 5 years. It is based on information reported in Gold Focus 2024 1 . World Gold Supply and Demand (2019-2023) Tonnes 2019 2020 2021 2022 2023 SUPPLY Mine Production 3,599 3,484 3,576 3,634 3,646 Recycling 1,276 1,293 1,136 1,140 1,239 Net Hedging Supply 6 — — — 59 Total Supply 4,880 4,777 4,712 4,774 4,945 DEMAND Jewelry Fabrication 2,152 1,324 2,230 2,196 2,194 Industrial Demand 333 309 337 315 305 Net Physical Investment 849 899 1,181 1,213 1,203 Net Hedging Demand — 39 7 9 — Net Official Sector Buying 605 255 450 1,082 1,030 Total Demand 3,939 2,826 4,205 4,815 4,732 Market Balance 942 1,950 507 (41 ) 212 Net Investment in ETPs 404 893 (189 ) (110 ) (244 ) Market Balance less ETPs 538 1,058 695 68 456 Gold Price (US$/oz, London) 1,393 1,770 1,799 1,800 1,941 Source: Gold Focus 2024 Sources of Gold Supply Based on data from Gold Focus 2024 , gold supply averaged 4,818 tonnes per year between 2019 and 2023. Sources of gold supply include both mine production and recycled above-ground stocks and, to a lesser extent, producer net hedging. The largest portion of gold supplied to the market is from mine production, which averaged approximately 3,588 tonnes per year from 2019 through 2023. The second largest source of annual gold supply is recycling gold, which is gold that has been recovered from jewelry and other fabricated products and converted back into marketable gold. Recycled gold averaged approximately 1,217 tonnes annually between 2019 through 2023. Sources of Gold Demand Based on data from Gold Focus 2024 , gold demand averaged 4,103 tonnes per year between 2019 and 2023. Gold demand generally comes from four sources: jewelry, industry (including medical applications), investment and the official sector (including central banks and supranational organizations). The largest source of demand comes from jewelry fabrication, which accounted for approximately 49% of the identifiable demand from 2019 through 2023 followed by net physical investment, which represents identifiable investment demand, which accounted for approximately 26% of the demand. 1 Gold Focus 2024 is published by Metals Focus, Ltd. which is a precious metals research consultancy based in London. Metals Focus Data Ltd., an affiliate of the Sponsor, provides the supply and demand data to Metals Focus, Ltd. When used in this report “tonne” refers to one metric tonne, which is equivalent to 1,000 kilograms or 32,151 troy ounces. 4 Table of Contents Gold demand is widely dispersed throughout the world with significant contributions from India and China. In many countries there are seasonal fluctuations in the levels of demand for gold—especially jewelry. However, as a result of variations in the timing of seasons throughout the world, seasonal fluctuations in demand do not appear to have a significant impact on the global gold price. Between 2019 and 2023, according to Gold Focus 2024 , central bank purchases averaged 684 tonnes. The prominence given by market commentators to this activity coupled with the total amount of gold held by the official sector has resulted in this area being one of the more visible shifts in the gold market. Operation of the Gold Bullion Market The global trade in gold consists of over-the-counter (“OTC”) transactions in spot, forwards, and options and other derivatives, together with exchange-traded futures and options. Global Over-the-Counter Market The OTC market trades on a continuous basis and accounts for most global gold trading. Market makers and participants in the OTC market trade with each other and their clients on a principal-to-principal basis. All risks and issues of credit are between the parties directly involved in the transaction. The three products relevant to LBMA market making are Spot (S), Forwards (F) and Options (O). There are eleven LBMA Market Makers who provide the service in one, two or all three products 2 . Member Membership Type Spot (S) Forwards (F) Options (O) Citibank N A Full Market Makers x x x Goldman Sachs International Full Market Makers x x x HSBC Full Market Makers x x x JP Morgan Chase Bank Full Market Makers x x x Morgan Stanley & Co International Ltd Full Market Makers x x x UBS AG Full Market Makers x x x BNP Paribas SA Market Makers x ICBC Standard Bank Plc Market Makers x Merrill Lynch International Market Makers x x Standard Chartered Bank Market Makers x x Toronto-Dominion Bank Market Makers x The OTC market provides a relatively flexible market in term of quotes, price, size, destinations for delivery and other factors. Bullion dealers customize transactions to meet their clients’ requirements. The OTC market has no formal structure and no open-outcry meeting place. The main centers of the OTC market are London, New York and Zurich. Mining companies, central banks, manufacturers of jewelry and industrial products, together with investors and speculators, tend to transact their business through one of these centers. Centers such as Dubai and several cities in the Far East also transact substantial OTC market business. Bullion dealers have offices around the world and most of the world’s major bullion dealers are either members or associate members of the LBMA. In the OTC market, the standard size of gold trades ranges between 5,000 and 10,000 ounces. Bid-offer spreads are typically $0.50 per ounce. Transaction costs in the OTC market are negotiable between the parties and therefore vary widely, with some dealers willing to offer clients competitive prices for larger volumes, although this will vary according to the dealer, the client and market conditions. Cost indicators can be obtained from various information service providers as well as dealers. 2 www.lbma.org.uk/aboutmembership 5 Table of Contents Liquidity in the OTC market can vary from time to time during the course of the 24-hour trading day. Fluctuations in liquidity are reflected in adjustments to dealing spreads—the difference between a dealer’s “buy” and “sell” prices. The period of greatest liquidity in the gold market generally occurs at the time of day when trading in the European time zones overlaps with trading in the United States, which is when OTC market trading in London, New York and other centers coincides with futures and options trading on the Commodity Exchange Inc. (the “COMEX”). The London Bullion Market Although the market for physical gold is global, most OTC market trades are cleared through London. In addition to coordinating market activities, the LBMA acts as the principal point of contact between the market and its regulators. A primary function of the LBMA is its involvement in the promotion of refining standards by maintenance of the “Good Delivery Lists,” which are the lists of LBMA accredited melters and assayers of gold. The LBMA also coordinates market clearing and vaulting, promotes good trading practices and develops standard documentation. The term “loco London” refers to gold bars physically held in London that meet the specifications for weight, dimensions, fineness (or purity), identifying marks (including the assay stamp of an LBMA acceptable refiner) and appearance set forth in “The Good Delivery Rules” published by the LBMA. Gold bars meeting these requirements are known as “London Good Delivery Bars.” The unit of trade in London is the troy ounce, whose conversion between grams is: 1,000 grams = 32.1507465 troy ounces and 1 troy ounce = 31.1034768 grams. A London Good Delivery Bar is acceptable for delivery in settlement of a transaction on the OTC market. Typically referred to as 400- ounce bars, a London Good Delivery Bar must contain between 350 and 430 fine troy ounces of gold, with a minimum fineness (or purity) of 995 parts per 1,000 (99.5%), be of good appearance and be easy to handle and stack. The fine gold content of a gold bar is calculated by multiplying the gross weight of the bar (expressed in units of 0.025 troy ounces) by the fineness of the bar. LBMA Gold Price The LBMA Gold Price is determined twice daily during London trading hours through an auction which provides reference gold prices for that day’s trading. The LBMA Gold Price was initiated on March 20, 2015 and replaced the London PM Gold Fix. The auction that determines the LBMA Gold Price is a physically settled, electronic and tradeable auction, with the ability to settle trades in U.S. dollars, euros or British pounds. The IBA provides the auction platform and methodology as well as the overall administration and governance for the LBMA Gold Price. Many long-term contracts are expected to be priced on the basis of either the morning (AM) or afternoon (PM) LBMA Gold Price, and many market participants are expected to refer to one or the other of these prices when looking for a basis for valuations. Participants in the IBA auction process submit anonymous bids and offers which are published on screen and in real-time. Throughout the auction process, aggregated gold bids and offers are updated in real-time with the imbalance calculated and the price updated every 45 seconds until the buy and sell orders are matched. When the net volume of all participants falls within a pre-determined tolerance, the auction is deemed complete and the applicable LBMA Gold Price is published. Information about the auction process (such as aggregated bid and offer volumes) will be immediately available after the auction on the IBA’s website. The Financial Conduct Authority (the “FCA”) in the U.K. regulates the LBMA Gold Price. Futures Exchanges Although GLDM does not invest in gold futures, information about the gold futures market is relevant as such markets are a source of liquidity for the overall market for gold and impact the price of gold. 6 Table of Contents The most significant gold futures exchange is the COMEX, part of the CME Group. It began to offer trading in gold futures contracts in 1974, and for most of the period since that date, it has been the largest exchange in the world for trading precious metals futures and options. The Tokyo Commodity Exchange (the “TOCOM”) is another significant futures exchange and has been trading gold since 1982. Trading on these exchanges is based on fixed delivery dates and transaction sizes for the futures and options contracts traded. Trading costs are negotiable. As a matter of practice, only a small percentage of the futures market turnover ever comes to physical delivery of the gold represented by the contracts traded. Both exchanges permit trading on margin. Margin trading can add to the speculative risk involved given the potential for margin calls if the price moves against the contract holder. Both the COMEX and the TOCOM operate through a central clearance system, and in each case, the exchange acts as a counterparty for each member for clearing purposes. Other commodity exchanges include, the Multi Commodity Exchange of India, the Shanghai Futures Exchange, the Shanghai Gold Exchange, ICE Futures US (the “ICE”), and the Dubai Gold & Commodities Exchange. The ICE and CME Group are members of the Intermarket Surveillance Group. Market Regulation The global gold markets are overseen and regulated by both governmental and self-regulatory organizations. In addition, certain trade associations have established rules and protocols for market practices and participants. Movements in the Price of Gold The following chart provides historical background on the price of gold. The chart illustrates movements in the price of gold in U.S. dollars per ounce over the period from the day the Shares began trading on the NYSE on June 26, 2018 to September 30, 2024, and is based on the LBMA Gold Price PM. Daily Gold Price – June 26, 2018 – September 30, 2024 LBMA Gold Price PM USD Responsibly Sourced Gold The LBMA’s Responsible Sourcing Programme (the “Programme”) is mandatory for all Good Delivery refiners trading with the London bullion market. The LBMA established the Programme to consolidate, strengthen and formalize the existing standards of the LBMA Good Delivery refiners’ due diligence practices with the intent to protect the integrity of the global supply chain for the wholesale precious metals markets. The Programme includes measures to combat money laundering, terrorist financing and human rights abuses globally. The Responsible Gold Guidance (the “Guidance”) is the specific document that underpins the Programme. All LBMA Good Delivery refiners are required to implement the LBMA’s Responsible Sourcing Guidance, which comprises the Guidance, and obtain annual independent assurance on their publicly available compliance reporting. Failure to appropriately adhere to the Guidance may result in a refiner being removed from the Good Delivery List, following the LBMA’s incident review process. CREATION AND REDEMPTION OF SHARES GLDM creates and redeems Shares from time to time, but only in Creation Units. The creation and redemption of Creation Units is only made in exchange for the delivery to GLDM or the distribution by GLDM of the amount of gold bullion represented by the Creation Units being created or redeemed. The amount of gold bullion required to be delivered to GLDM in connection with any creation, or paid out upon redemption, is based on the combined NAV of the number of Shares included in the Creation Units being created or redeemed as determined on the day the order to create or redeem Creation Units is properly received and accepted. The standard settlement cycle for most broker-dealer securities transactions is one business day, T+1 (the trade date plus one business day). 7 Table of Contents Authorized Participants are the only persons that may place orders to create and redeem Creation Units. To become an Authorized Participant, a person must enter into an agreement with the Administrator and the Sponsor (the "Participant Agreement"). The Participant Agreement and the related procedures attached thereto may be amended by the Administrator and the Sponsor without the consent of any shareholder or Authorized Participant. Authorized Participants who make deposits with GLDM in exchange for Creation Units receive no fees, commissions or other form of compensation or inducement of any kind from either the Sponsor or GLDM, and no such person has any obligation or responsibility to the Sponsor or GLDM to effect any sale or resale of Shares. Authorized Participants may act for their own accounts or as agents for broker-dealers, custodians and other securities market participants that wish to create or redeem Creation Units. An order for one or more Creation Units may be placed by an Authorized Participant on behalf of multiple clients. Persons interested in purchasing Creation Units should contact the Sponsor or the Administrator to obtain the contact information for the Authorized Participants. Shareholders who are not Authorized Participants’ will only be able to redeem their Shares through an Authorized Participant. As of the date of this annual report, the Authorized Participants are Goldman Sachs & Co. LLC, J.P. Morgan Securities LLC, BofA Securities Inc., Morgan Stanley & Co. LLC, UBS Securities LLC, Virtu Americas LLC and HSBC Securities (USA) Inc. An updated list of Authorized Participants can be obtained from the Administrator or the Sponsor. All gold bullion must be delivered by Authorized Participants to GLDM and distributed by GLDM in unallocated form through credits and debits between Authorized Participants’ unallocated accounts and GLDM's unallocated accounts with the Custodians. All gold bullion must be of at least a minimum fineness (or purity) of 995 parts per 1,000 (99.5%) and otherwise conform to the rules, regulations, practices and customs of the LBMA, including the specifications for a London Good Delivery Bar. Delivery of Required Deposits An Authorized Participant who places a purchase order is responsible for transferring the required gold bullion deposit amount to GLDM's unallocated account with a Custodian on the next business day in London following the purchase order date. Upon confirmation of receipt and allocation of the gold bullion deposit amount, the Administrator will direct DTC to credit the number of Creation Units ordered to the Authorized Participant’s DTC account. The expense and risk of delivery, ownership and safekeeping of gold bullion until such gold bullion has been received by GLDM will be borne solely by the Authorized Participant. If gold bullion is to be delivered other than as described above, the Sponsor is authorized to establish such procedures and to appoint such custodians and establish such custody accounts as the Sponsor determines to be desirable. From time to time, the Sponsor will identify to the Authorized Participants and the Administrator which Custodian may be used for the deposit of the required gold bullion deposit amount. Acting on standing instructions given by the Administrator, the selected Custodian will transfer the gold bullion deposit amount from GLDM's unallocated account to GLDM's allocated account with such Custodian by allocating to GLDM's allocated account specific bars of gold bullion which the Custodian holds or instructing a subcustodian to allocate specific bars of gold bullion held by or for the subcustodian. The gold bullion bars in an allocated gold bullion account are specific to that account and are identified by a list which shows, for each gold bullion bar, the refiner, assay or fineness, serial number and gross and fine weight. Gold bullion held in GLDM's allocated account with the Custodians is the property of GLDM and is not traded, leased or loaned under any circumstances. 8 Table of Contents The selected Custodian will use its commercially reasonable efforts to transfer the gold bullion deposit amount from GLDM's unallocated account to GLDM's allocated account by 3:00 PM (London time). Upon the Administrator's receipt of confirmation from the selected Custodian that the gold bullion deposit amount has been transferred from GLDM's unallocated account to GLDM's allocated account, the Administrator will direct DTC to credit the number of Creation Units ordered by the Authorized Participant to the Authorized Participant’s DTC account. During the period of the transfer, all Shareholders will be exposed to the risks of unallocated gold to the extent of that gold bullion deposit amount until the Custodian completes the allocation process. See “Risk Factors—Risks Related to the Custody of Gold—Gold bullion held in GLDM’s unallocated gold bullion account and any Authorized Participant’s unallocated gold bullion account is not segregated from the Custodian’s assets.” Rejection of Purchase Orders GLDM has the right, but not the obligation, to reject a purchase order if (1) the order is not in proper form as described in the Participant Agreement, (2) the fulfillment of the order, in the opinion of its counsel, might be unlawful, (3) it determines that acceptance of the order from an Authorized Participant would expose GLDM to credit risk, or (4) circumstances outside the control of the Administrator, the Sponsor or the Custodians make the purchase, for all practical purposes, not feasible to process. Redemption Procedures The procedures by which an Authorized Participant can redeem one or more Creation Units mirror the procedures for the creation of Creation Units. On any business day, an Authorized Participant may place an order with the Administrator to redeem one or more Creation Units. Redemption orders must be placed with the Administrator no later than 3:59:59 p.m. New York time. A redemption order so received is effective on the date it is received in satisfactory form by the Administrator. The day on which the Administrator receives a valid redemption order is the redemption order date. Trading of Shares The Shares are listed on NYSE Arca under the ticker symbol GLDM. The Shares may be bought and sold in the secondary market throughout the trading day like other publicly traded securities. While the Shares are issued in Creation Units at NAV, the Shares traded in the secondary market may trade at prices that are lower or higher than their NAV per Share. The amount of the discount or premium in the trading price relative to the NAV per Share is a function of supply and demand, among other things, and may be influenced by non-concurrent trading hours between NYSE Arca and the COMEX, London, Zurich and Singapore. While the Shares trade on NYSE Arca until 4:00 p.m. New York time, liquidity in the global gold market is reduced after the close of the COMEX at 1:30 p.m. New York time. As a result, after 1:30 p.m. New York time, trading spreads, and the resulting premium or discount, on the Shares may widen. Most retail investors purchase and sell the Shares through traditional brokerage or other intermediary accounts. Purchases or sales of the Shares in the secondary market, which will not involve the Funds, may be subject to customary brokerage commissions. Determination of Redemption Distribution The redemption distribution from GLDM consists of a credit to the redeeming Authorized Participant’s unallocated account of the number of ounces of gold bullion held by GLDM to be paid out upon redemption of a Creation Unit. There will be no cash distributions made to Authorized Participants upon redemption. 9 Table of Contents Delivery of Redemption Distribution The redemption distribution due from GLDM is delivered to the Authorized Participant on the business day following the redemption order date if, by 10:00 a.m. New York time on such business day, the Administrator’s DTC account has been credited with the Creation Units to be redeemed. From time to time, the Sponsor will identify to the Authorized Participants and the Administrator from which Custodian the gold bullion redemption amount may be received. The selected Custodian transfers the redemption gold bullion amount from GLDM's allocated account to GLDM's unallocated account and, thereafter, to the redeeming Authorized Participant’s unallocated account. The Authorized Participant and GLDM are each at risk in respect of gold bullion credited to their respective unallocated accounts in the event of the Custodian’s insolvency. See “Risk Factors—Risks Related to the Custody of Gold—Gold bullion held in GLDM’s unallocated gold bullion account and any Authorized Participant’s unallocated gold bullion account is not segregated from the Custodian’s assets.” Suspension or Rejection of Redemption Orders GLDM may, in its discretion, and will when directed by the Sponsor, suspend the right of redemption, or postpone the redemption settlement date for: (1) any period during which NYSE Arca is closed other than customary weekend or holiday closings, or trading on NYSE Arca is suspended or restricted, (2) any period during which an emergency exists as a result of which delivery, disposal or evaluation of gold bullion is not reasonably practicable, or (3) such other period as the Sponsor determines to be necessary for the protection of the shareholders. GLDM has the right, but not the obligation, to reject a redemption order if (1) the order is not in proper form as described in the Participant Agreement, (2) the fulfillment of the order, in the opinion of its counsel, might be unlawful, (3) it determines that acceptance of the order from an Authorized Participant would expose GLDM to credit risk, or (4) circumstances outside the control of the Administrator, the Sponsor or the Custodians make the redemption, for all practical purposes, not feasible to process. The Sponsor will not be liable to any person or liable in any way for any loss or damages that may result from any such suspension, postponement or rejection. Creation and Redemption Transaction Fee An Authorized Participant is required to pay a transaction fee to the Administrator of $500 per order to create or redeem Creation Units of GLDM. An order may include multiple Creation Units. The transaction fee may be changed from time to time at the sole discretion of the Sponsor and upon written notice to the Authorized Participant, which notice may be provided by disclosure in GLDM’s prospectus. In addition, the Sponsor may waive the transaction fee on the creation or redemption of Creation Units for one or more Authorized Participants from time to time in its sole discretion. LIABILITY No shareholder of GLDM shall be subject in such capacity to any personal liability whatsoever to any person in connection with GLDM’s property or the acts, obligations or affairs of GLDM. Shareholders shall have the same limitation of personal liability as is extended to stockholders of a private corporation for profit incorporated under the Delaware General Corporation Law. CUSTODY OF GLDM ’ S GOLD Custody of the gold bullion deposited with and held by GLDM is provided by ICBC at its London vault and by JPMorgan at its London, New York and Zurich vaults. Each Custodian holds all of GLDM's gold in its respective vault premises except when the gold has been allocated in the vault of a subcustodian, and in such cases each Custodian has agreed that it will use commercially reasonable efforts to promptly transport or transfer the gold from the subcustodian’s vault to the Custodian’s London vault, at the Custodian’s cost and risk. 10 Table of Contents The Trust, on behalf of GLDM, has entered into custody agreements with each Custodian which establish GLDM's unallocated and allocated accounts with that Custodian. GLDM's unallocated accounts are used to (1) facilitate the transfer of gold bullion deposits and gold bullion redemption distributions between Authorized Participants and GLDM in connection with the creation and redemption of Creation Units, (2) sell gold bullion to pay GLDM’s expenses, and (3) otherwise transfer gold bullion into and out of GLDM or between Custodians. The gold bullion bars held in an unallocated account with a Custodian are not segregated from the Custodian’s assets. The account holder therefore has no ownership interest in any specific bars of gold bullion that the Custodian holds or owns. The account holder is an unsecured creditor of the Custodian, and credits to an unallocated account are at risk of the Custodian’s insolvency, in which event it may not be possible for a liquidator to identify any gold bullion held in an unallocated account as belonging to the account holder rather than to the Custodian. Each Custodian agrees to allocate all gold bullion deposited into GLDM's unallocated account to GLDM's allocated account with the Custodian by the close of business on each business day by selecting bars of gold bullion for deposit to GLDM's allocated account with that Custodian from unallocated gold bars that the Custodian holds or by instructing a subcustodian to allocate bars from unallocated bars held by the subcustodian. Except when gold is transferred in and out of GLDM, all gold deposited with GLDM is held in GLDM's allocated accounts with the Custodians. All gold bullion allocated to GLDM must conform to the rules, regulations, practices and customs of the LBMA, and the Custodians must replace any nonconforming gold bullion with conforming gold bullion as soon as practical. The gold bullion bars in an allocated gold bullion account are specific to that account and are identified by a list which shows, for each gold bullion bar, the refiner, assay or fineness, serial number and gross and fine weight. Gold bullion held in GLDM's allocated account with each Custodian is the property of GLDM and is not traded, leased or loaned under any circumstances. Each Custodian is authorized to appoint from time to time one or more subcustodians to hold GLDM’s gold bullion until it can be transported to the Custodian’s London vault. The Custodians have not utilized any subcustodians to date. Current lists of all gold held by the Custodians, including any held with a subcustodian, is available on the Sponsor’s website at www.spdrgoldshares.com. In accordance with LBMA practices and customs, the Custodians do not have written custody agreements with the subcustodians they select. The lack of such written agreements could affect the recourse of GLDM and the Custodians against any subcustodian in the event a subcustodian does not use due care in the safekeeping of GLDM’s gold bullion. See “Risk Factors—Risks Related to the Custody of Gold—The ability of the Administrator and the Custodians to take legal action against subcustodians may be limited.” The Custodians are required to use reasonable care in selecting subcustodians. ICBC will monitor the conduct of its subcustodians, and, where it is legally permissible to do so, promptly advise GLDM of any difficulties or problems existing with respect to its subcustodians of which the Custodian is aware. Each Custodian will use commercially reasonable efforts to obtain delivery of gold bullion from those subcustodians appointed by it. ICBC is not otherwise liable for the acts or omissions, or for the insolvency of, any of its subcustodians unless the appointment of a subcustodian was made fraudulently, negligently or in bad faith or not otherwise in accordance with the ICBC Allocated Account Agreement. JPMorgan is liable for any loss suffered by the Trust or GLDM as a result of any act or omission or insolvency of any subcustodian, including to the extent directly resulting from JPMorgan’s fraud or negligence in the appointment of that subcustodian Under the customs and practices of the London bullion market, allocated gold bullion is held by custodians and, on their behalf, by subcustodians under arrangements that permit each entity for which gold bullion is being held: (1) to request from the entity’s custodian (and a custodian or subcustodian to request from its subcustodian) a list identifying each gold bullion bar being held and the identity of the particular custodian or subcustodian holding the gold bullion bar and (2) to request the entity’s custodian to release the entity’s gold within two business days following demand for release. Each custodian or subcustodian is obligated under the customs and practices of the London bullion market to provide the bar list and the identification of custodians and subcustodians referred to in (1) above, and each custodian is obligated to release gold as requested. Under English law, unless otherwise provided in any applicable custody agreement, a custodian generally is liable to its customer for failing to take reasonable care of the customer’s gold and for failing to release the customer’s gold upon demand. 11 Table of Contents The Custodians do not require subcustodians to be insured or bonded with respect to their custodial activities. Each Custodian has agreed to maintain insurance in connection with the storage of GLDM’s gold, including covering any loss of gold, on such terms and conditions as it considers adequate or appropriate, which may not cover the full amount of gold. Subject to confidentiality restrictions and upon prior notice, GLDM may review evidence of a Custodian's insurance. GLDM will not be a beneficiary of any such insurance and does not have the ability to dictate the nature or amount of the coverage. Therefore, shareholders cannot be assured that a Custodian maintains adequate insurance or any insurance with respect to the gold bullion held by the Custodian on behalf of GLDM. The Custodians and their respective affiliates may from time-to-time purchase or sell gold bullion or Shares for their own accounts, as agents for their customers and for accounts over which they exercise investment discretion. Description of the Custody Agreements ICBC entered into the Second Amended and Restated Allocated Gold Account Agreement (the "ICBC Allocated Account Agreement") and the First Amended and Restated Unallocated Gold Account Agreement (the "ICBC Unallocated Account Agreement" and together with the ICBC Allocated Account Agreement, as amended, restated, supplemented or otherwise modified from time to time, the "ICBC Custody Agreements") with the Trust on behalf of GLDM, and JPMorgan entered into the Allocated Precious Metal Account Agreement (the "JPMorgan Allocated Account Agreement") and the Unallocated Precious Metal Account Agreement (the "JPMorgan Unallocated Account Agreement" and together with the JPMorgan Allocated Account Agreement, as amended, restated, supplemented or otherwise modified from time to time, the "JPMorgan Custody Agreements" and together with the ICBC Custody Agreements, the "Custody Agreements") with the Trust on behalf of GLDM. The Custody Agreements establish GLDM's unallocated and allocated accounts with the Custodians. The following is a description of the material terms of the Custody Agreements. As the Custody Agreements are similar in form, they are discussed together, with material distinctions between the agreements noted. Transfers into and from GLDM's Unallocated Accounts All transfers into and out of GLDM's unallocated accounts are made only upon the Custodians' receipt of instructions given by the Trust or the Administrator. Each Custodian accepts deposits into GLDM's unallocated account of gold the Custodian receives from (1) GLDM's allocated account in connection with a redemption of Creation Units, (2) an Authorized Participant's unallocated account in connection with the creation of Creation Units, (3) the other Custodian's unallocated account in connection with a book entry or other transfer between the Custodians or (4) an unallocated account with a third-party permitted under the Custody Agreements. A withdrawal from GLDM's unallocated account with a Custodian may be made by (1) transferring gold to an Authorized Participant's unallocated account in connection with a redemption of Creation Units, (2) allocating gold to GLDM's allocated account in connection with a creation of Creation Units, (3) transferring gold, including by book entry transfers, to the other Custodian's GLDM unallocated account or (4) transferring gold to an unallocated account with a London Precious Metals Clearing Limited ("LPMCL") gold clearing bank as permitted under the Custody Agreements. The Custody Agreements also allow for the withdrawal of physical gold from GLDM's unallocated account upon the Trust's or the Adminstrator's instruction. Any gold made available in a physical form must comply with the rules, regulations, practices and customs of the LBMA, LPMCL, the FCA, the Prudential Regulation Authority ("PRA"), the Bank of England or any applicable regulatory body. The Custody Agreements provide for the full allocation of all gold credited to GLDM's unallocated account at the end of each business day. The Custody Agreements include an overdraft facility with each Custodian under which each Custodian will make available to GLDM's unallocated account with that Custodian up to 430 fine ounces of gold in order to allow the Custodian to fully allocate all gold credited to GLDM's unallocated account with that Custodian to GLDM's allocated account with that Custodian at the end of each business day. 12 Table of Contents Transfers into and from GLDM's Allocated Accounts All transfers into and out of GLDM's allocated accounts are made only upon receipt of and in accordance with instructions from the Trust. The Custodians receive transfers of gold into GLDM's allocated accounts by debiting gold from GLDM's unallocated account and crediting such gold to GLDM's allocated account. Conversely, the Custodians transfer gold from GLDM's allocated accounts by debiting gold from GLDM's allocated account and crediting the gold to GLDM's unallocated account. From time to time, the Sponsor may instruct JPMorgan on behalf of the Trust to transfer gold between GLDM's three allocated accounts maintained by JPMorgan in London, New York and Zurich. Withdrawals of Gold Directly from GLDM 's Allocated Accounts Upon the Trust’s or the Administrator’s instruction, each Custodian will debit gold bullion from GLDM's allocated account and make the gold bullion available for collection from the Custodian or, if separately agreed, for delivery by the Custodian in accordance with its usual practices at GLDM’s expense and risk. Except for possible physical delivery of gold between Custodians, the Trust and the Custodians expect that the Trust will withdraw gold bullion physically from GLDM's allocated account (rather than by crediting it to the GLDM's unallocated account and instructing a further transfer from that account) only in exceptional circumstances. Unless the Trust specifies the bars of gold bullion to be debited from GLDM's allocated account, the Custodians are entitled to select the gold bullion bars Exclusion of Liability ICBC will use reasonable care in the performance of its duties under the ICBC Custody Agreements and is only responsible for any loss or damage suffered by GLDM as a direct result of any negligence, fraud, or willful default on the part of ICBC in the performance of the duties under the ICBC Custody Agreements .ICBC’s liability is further limited to the market value of the gold bullion held in GLDM's allocated account with ICBC and the amount of the gold bullion credited to GLDM's unallocated account with ICBC at the time such negligence, fraud, or willful default is either discovered by or notified to ICBC, provided that ICBC notifies the Sponsor and the Trust promptly after any discovery. Except for ICBC’s obligation to use commercially reasonable efforts to promptly transport gold held with a subcustodian to itself, ICBC is not liable for the acts or omissions, or for the insolvency of, any of its subcustodians unless the appointment of a subcustodian was made fraudulently, negligently or in bad faith or not otherwise in accordance with the ICBC Allocated Account Agreement. Furthermore, ICBC has no duty to make or take or to require any subcustodian selected by it to make or take any special arrangements or precautions beyond those required by applicable rules, regulations and practices or as specifically set forth in the ICBC Custody Agreements. ICBC is not liable for any delay in performance or any non-performance of any of its obligations under the ICBC Custody Agreements by reason of any cause beyond ICBC’s reasonable control. JPMorgan will use reasonable care in the performance of its duties under the JPMorgan Unallocated Account Agreement and will act as a reasonable and prudent custodian of gold in the performance of its duties under the JPMorgan Allocated Account Agreement. JPMorgan will be responsible for any loss or damage suffered by GLDM as a direct result of any negligence, fraud or willful misconduct in the performance of its duties. JPMorgan will also be liable for any loss suffered by the Trust or GLDM as a result of any act or omission or insolvency of any subcustodian, including to the extent directly resulting from JPMorgan's fraud or negligence in the appointment of that subcustodian. Under the JPMorgan Custody Agreements, JPMorgan's liability is limited to the aggregate market value of GLDM's allocated account balance and GLDM's unallocated account balance at the time of such negligence, fraud or willful misconduct or act, omission or insolvency of any subcustodian. JPMorgan will not be liable for any consequential loss, or loss of profit or goodwill, whether or not resulting from any negligence, fraud or willful misconduct on behalf of JPMorgan. JPMorgan will not be liable for any delay in performance or any non-performance of any of its obligations under the JPMorgan Custody Agreements by reason of any cause beyond its reasonable control. 12 Table of Contents Indemnity Solely out of GLDM’s assets, GLDM will indemnify each Custodian against all costs and expenses, damages, liabilities and losses which such Custodian may suffer or incur, directly or indirectly, in connection with services provided to GLDM under the Custody Agreements, except to the extent that such sums are due directly to the Custodian’s negligence, willful default (or willful misconduct in the case of JPMorgan) or fraud. Termination Each Custody Agreement may be terminated by the Trust or the relevant Custodian upon 90 business days’ prior written notice or immediately upon certain events of insolvency of the other party. The ICBC Custody Agreements may also be terminated immediately by written notice (1) in the event it becomes unlawful for ICBC or the Trust to be a party to the agreement or for ICBC to offer its services to the Trust or for the Trust to receive such services, (2) by the Trust if the Custodian ceases to offer the services contemplated by the ICBC Custody Agreements or withdraws from the gold bullion business or (3) by the Custodian if the Trust fails to provide requested confirmations and evidence of the Trust’s compliance with certain sanctions related obligations. The JPMorgan Custody Agreements may also be terminated immediately by written notice by JPMorgan if the Trust breaches, or if JPMorgan has reasonable grounds to believe that the Trust has breached, certain sanctions related representations in the JPMorgan Custody Agreements . Governing Law The Custody Agreements are governed by English law. GLDM and each Custodian consents to the non-exclusive jurisdiction of the courts of the State of New York and the federal courts located in the borough of Manhattan in New York City. UNITED STATES FEDERAL TAX CONSEQUENCES The following discussion of the material U.S. federal income tax consequences that generally apply to the purchase, ownership and disposition of Shares by a U.S. Shareholder (as defined below), and certain U.S. federal gift and estate tax consequences that generally apply to an investment in Shares by a Non-U.S. Shareholder (as defined below), represents, insofar as it describes conclusions as to U.S. federal tax law and subject to the limitations and qualifications described therein, the opinion of Carter Ledyard & Milburn LLP, special U.S. federal tax counsel to the Sponsor. The discussion below is based on the U.S. Internal Revenue Code of 1986, as amended, (the “Code”), Treasury Regulations promulgated under the Code and judicial and administrative interpretations of the Code, all as in effect on the date of this annual report and all of which are subject to changes either prospectively or retroactively. The tax treatment of Shareholders may vary depending upon their own particular circumstances. Certain Shareholders (including broker-dealers, traders or other investors with special circumstances) may be subject to special rules not discussed herein. In addition, the following discussion applies only to investors who hold Shares as “capital assets” within the meaning of Code section 1221. Moreover, the discussion herein does not address the effect of any state, local or foreign tax law on the disposition of Shares. Purchasers of Shares are urged to consult their own tax advisors with respect to all U.S. federal, state, local and foreign tax law considerations potentially applicable to their investment in Shares. For purposes of this discussion, a “U.S. Shareholder” is a Shareholder that is: • An individual who is a U.S. citizen or resident of the United States for U.S. federal income tax purposes; • An entity treated as a corporation for U.S. federal income tax purposes that is created or organized in or under the laws of the United States or any political subdivision thereof; • An estate, the income of which is includible in gross income for U.S. federal income tax purposes regardless of its source; or 13 Table of Contents • A trust, if (1) a court within the United States is able to exercise primary supervision over the administration of the trust and one or more U.S. persons have the authority to control all substantial decisions of the trust; or (2) the trust has a valid election in effect under applicable U.S. Treasury regulations to be treated as a U.S. person. A Shareholder (other than a partnership or other entity subject to tax as a partnership) that is not a U.S. Shareholder as defined above is generally considered a “Non-U.S. Shareholder” for purposes of this discussion. For U.S. federal income tax purposes, the treatment of any beneficial owner of an interest in a partnership, including any entity treated as a partnership for U.S. federal income tax purposes, will generally depend upon the status of the partner and upon the activities of the partnership. Partnerships and partners in partnerships should consult their tax advisors about the U.S. federal income tax consequences of purchasing, owning and disposing of Shares. Taxation of GLDM GLDM is treated as a “grantor trust” for U.S. federal income tax purposes. There can be no assurance that the Internal Revenue Service (“IRS”) will agree with that treatment, and it is possible that the IRS or another tax authority could assert a position contrary thereto and that a court could sustain that contrary position. If GLDM were found not to be taxable as a “grantor trust,” the Sponsor would likely terminate and liquidate GLDM. The balance of this disclosure assumes that GLDM will be treated as a “grantor trust” for U.S. federal income tax purposes. As a “grantor trust” for U.S. federal income tax purposes, neither the Trust nor GLDM itself will pay U.S. federal income tax. Instead, the income and expenses of GLDM “flow through” to the Shareholders, and the Administrator will report GLDM’s income, gains, losses and deductions to the IRS on that basis. Taxation of U.S. Shareholders U.S. Shareholders generally will be treated, for U.S. federal income tax purposes, as if they directly owned a pro rata share of the underlying assets held in GLDM. U.S. Shareholders also will be treated as if they directly derived their respective pro rata shares of the GLDM’s income, if any, regardless of whether they receive any distributions from GLDM. Shareholders will also be treated as if they directly incurred their respective pro rata shares of GLDM’s expenses. In the case of Shareholders that purchase Shares for cash, their initial tax basis in their pro rata share of the assets held in GLDM at the time they acquire their Shares will be equal to their cost of acquiring the Shares. In the case of a Shareholder that acquires his, her or its Shares by delivering gold bullion to GLDM, the delivery of gold bullion to GLDM in exchange for the underlying gold bullion represented by the Shares will not be a taxable event to the Shareholder, and the Shareholder’s tax basis and holding period for the Shareholder’s pro rata share of the gold bullion held in GLDM will be the same as the Shareholder’s tax basis and holding period for the gold bullion delivered in exchange therefor. For purposes of this discussion, it is assumed that all of a Shareholder’s Shares are acquired on the same date, at the same price per Share and, except where otherwise noted, that GLDM’s sole asset is gold bullion. When GLDM sells gold bullion, for example to pay expenses, a Shareholder generally will recognize gain or loss in an amount equal to the difference between (1) the Shareholder’s pro rata share of the amount realized by GLDM upon the sale; and (2) the Shareholder’s tax basis for his, her or its pro rata share of the gold bullion that was sold, which gain or loss will generally be long-term or short-term capital gain or loss, depending upon whether the Shareholder is treated as having held his, her or its share of the gold bullion that was sold for more than one year. A Shareholder’s tax basis for his, her or its share of any gold bullion sold by GLDM generally will be determined by multiplying the Shareholder’s total tax basis for his, her or its share of all of the gold bullion held in GLDM immediately prior to the sale by a fraction, the numerator of which is the amount of gold bullion sold and the denominator of which is the total amount of the gold bullion held in GLDM immediately prior to the sale. After any such sale, a Shareholder’s tax basis for his, her or its pro rata share of the gold bullion remaining in GLDM will be equal to the Shareholder’s tax basis for his, her or its share of the total amount of the gold bullion held in GLDM immediately prior to the sale, less the portion of such tax basis allocable to the Shareholder’s share of the gold bullion that was sold. 14 Table of Contents Upon a Shareholder’s sale of some or all of his, her or its Shares, the Shareholder will be treated as having sold the portion of his, her or its pro rata share of the gold bullion held in GLDM at the time of the sale that is attributable to the Shares sold. Accordingly, the Shareholder generally will recognize gain or loss on the sale in an amount equal to the difference between (1) the amount realized pursuant to the sale of the Shares, and (2) the Shareholder’s tax basis for the portion of its pro rata share of the gold bullion held in GLDM at the time of sale that is attributable to the Shares sold, as determined in the manner described in the preceding paragraph. A redemption of some or all of a Shareholder’s Shares in exchange for the underlying gold bullion represented by the Shares redeemed generally will not be a taxable event to the Shareholder. The Shareholder’s tax basis for the gold bullion received in the redemption generally will be the same as the Shareholder’s tax basis for the portion of his, her or its pro rata share of the gold bullion held in GLDM immediately prior to the redemption that is attributable to the Shares redeemed. The Shareholder’s holding period with respect to the gold bullion received should include the period during which the Shareholder held the Shares redeemed. A subsequent sale of the gold bullion received by the Shareholder will be a taxable event for U.S. federal income tax purposes, unless a nonrecognition provision of the Code applies to such sale. After any sale or redemption of less than all of a Shareholder’s Shares, the Shareholder’s tax basis for his, her or its pro rata share of the gold bullion held in GLDM immediately after such sale or redemption generally will be equal to the Shareholder’s tax basis for his, her or its share of the total amount of the gold bullion held in GLDM immediately prior to the sale or redemption, less the portion of such basis which is taken into account in determining the amount of gain or loss recognized by the Shareholder upon such sale or, in the case of a redemption, which is treated as the basis of the gold bullion received by the Shareholder in the redemption. As noted above, the foregoing discussion assumes that all of a Shareholder’s Shares were acquired on the same date and at the same price per Share. If a Shareholder owns multiple lots of Shares ( i.e. , Shares acquired on different dates and/or at different prices), it is uncertain whether the Shareholder may use the “specific identification” rules that apply under Treasury Regulations Section 1.1012-1(c) in the case of sales of shares of stock, in determining the amount, and the long-term or short-term character, of any gain or loss recognized by the Shareholder upon GLDM’s sale of gold bullion, upon the Shareholder’s sale of any Shares, or upon the Shareholder’s sale of any gold bullion received by the Shareholder upon the redemption of any of the Shareholder’s Shares. The IRS could take the position that a Shareholder has a blended tax basis and holding period for his, her or its pro rata share of the underlying gold bullion in GLDM. Shareholders who or that hold multiple lots of Shares, or who or that are contemplating acquiring multiple lots of Shares, are urged to consult their own tax advisors as to the determination of the tax basis and holding period for the underlying gold bullion related to such Shares. Maximum 28% Long-Term Capital Gains Tax Rate for U.S. Shareholders Who are Individuals Under current U.S. federal income tax law, gains recognized by non-corporate U.S. Shareholders from the sale of “collectibles,” including gold bullion, held for more than one year are taxed at a maximum rate of 28%, rather than the 20% rate applicable to most other long-term capital gains. However, if an individual U.S. Shareholder is otherwise subject to a rate lower than 28% if the gain was ordinary income due to being in a lower tax bracket, the 28% rate does not apply and the lower rate applies. For these purposes, gain recognized by a non-corporate U.S. Shareholder upon the sale of an interest in a trust that holds collectibles is treated as gain recognized on the sale of collectibles, to the extent that the gain is attributable to unrealized appreciation in value of the collectibles held by the trust. Therefore, any gain recognized by a non-corporate U.S. Shareholder attributable to a sale of Shares held for more than one year, or attributable to GLDM’s sale of any gold bullion which the Shareholder is treated (through his, her or its ownership of Shares) as having held for more than one year, generally will be taxed at a maximum U.S. federal income tax rate of 28%; if the Shares or gold bullion sold is held (or treated as held) for one year or less, then any such gain so recognized would be taxed for U.S. federal income tax purposes at the same rate at which ordinary income is taxed. 15 Table of Contents 3.8% Tax on Net Investment Income Certain U.S. Shareholders who are individuals are required to pay a 3.8% tax on the lesser of the excess of their modified adjusted gross income over a threshold amount ($250,000 for married persons filing jointly and $200,000 for single taxpayers) or their “net investment income,” which generally includes dividends, interest, and net gains from the disposition of investment property. This tax is in addition to any regular U.S. federal income tax due on such investment income. A similar tax will apply to certain shareholders that are estates or trusts. U.S. Shareholders are urged to consult their tax advisors regarding the effect, if any, this law may have on an investment in the Shares. Brokerage Fees and Trust Expenses Any brokerage or other transaction fee incurred by a Shareholder in purchasing Shares will be treated as part of the Shareholder’s tax basis in the underlying assets of GLDM. Similarly, any brokerage fee incurred by a Shareholder in selling Shares will reduce the amount realized by the Shareholder with respect to the sale. Shareholders will be required to recognize gain or loss upon a sale of gold bullion by GLDM (as discussed above), even though some or all of the proceeds of such sale are used by the Administrator to pay GLDM’s expenses. Shareholders may deduct their respective pro rata shares of each expense incurred by GLDM to the same extent as if they directly incurred the expense. Shareholders who or that are individuals, estates or trusts, however, may be required to treat some or all of the expenses of GLDM as miscellaneous itemized deductions. Individuals may not deduct miscellaneous itemized deductions for tax years beginning after December 31, 2017 and before January 1, 2026. For tax years beginning before January 1, 2018 and after December 31, 2025, individuals may deduct certain miscellaneous itemized deductions only to the extent they exceed 2% of adjusted gross income. In addition, such deductions may be subject to phase-outs and other limitations under applicable Investment by Tax-Exempt U.S. Shareholders Tax-Exempt U.S. Shareholders are subject to United States federal income tax only on their unrelated business taxable income (“UBTI”). Unless they incur debt in order to purchase Shares, it is expected that U.S. Tax-Exempt Shareholders should not realize UBTI in respect of income or gains from the Shares. U.S. Tax-Exempt Shareholders are urged to consult their own independent tax advisors regarding the United States federal income tax consequences of holding Shares in light of their particular circumstances. Investment by Regulated Investment Companies Mutual funds and other investment vehicles which are taxed as “regulated investment companies” within the meaning of section 851 of the Code are strongly urged to consult with their tax advisors concerning the likelihood that an investment in Shares will affect their qualification as a “regulated investment company.” 16 Table of Contents Investment by Certain Retirement Plans Code Section 408(m) provides that the acquisition of a “collectible by an IRA, or a participant-directed account maintained under any plan that is tax-qualified under Code section 401(a), is treated as a taxable distribution from the account to the owner of the IRA, or to the participant for whom the plan account is maintained, of an amount equal to the cost to the account of acquiring the collectible. The IRS has issued private letter rulings to taxpayers, including an affiliate of the Sponsor, concluding that the purchase of shares in trusts similar to GLDM by an IRA owner or plan participant will not constitute the acquisition of a collectible or be treated as resulting in a taxable distribution to the IRA owner or plan participant under Code section 408(m). However, if any of the shares so purchased are distributed from an IRA or plan account to the IRA owner or plan participant, or if any gold received by such IRA or plan account upon the redemption of any of shares purchased by it is distributed (or treated as distributed under Code section 408(m)) to the IRA owner or plan participant, the shares or gold so distributed will be subject to U.S. federal income tax in the year of distribution, to the extent provided under the applicable provisions of Code section 408(d), 408(m) or 402. Private letter rulings are only binding on the IRS with respect to the taxpayer to which they are issued. GLDM has neither requested nor obtained, nor intends to request or obtain, such a private letter ruling. Accordingly, IRA owners and plan participants are strongly urged to consult with their tax advisors before directing any such accounts to invest in the Shares. See also “ERISA and Related Considerations.” U.S. Information Reporting and Backup Withholding for U.S. and Non-U.S. Shareholders The Administrator will file certain information returns with the IRS, and provide certain tax-related information to Shareholders, in connection with GLDM. The Administrator will make information available that will enable brokers and custodians through which investors hold Shares to prepare and, if required, file certain information returns (e.g., Form 1099) with the IRS. To the extent required by applicable regulations, each Shareholder will be provided with information regarding its allocable portion of GLDM’s annual income, expenses, gains and losses (if any). A Shareholder may be subject to U.S. backup withholding tax in certain circumstances unless the Shareholder provides his, her or its taxpayer identification number and complies with certain certification procedures. Non-U.S. Shareholders may have to comply with certification procedures to establish that they are not U.S. persons, and some Non-U.S. Shareholders will be required to meet certain information reporting or certification requirements imposed by the Foreign Account Tax Compliance Act (“FATCA”), in order to avoid certain information reporting and backup withholding tax requirements. The amount of any backup withholding will be allowed as a credit against a Shareholder’s U.S. federal income tax liability and may entitle such a Shareholder to a refund, provided that the required information is furnished to the IRS. Estate and Gift Tax Considerations for Non-U.S. Shareholders Under the U.S. federal tax law, individuals who are neither citizens nor residents (as determined for U.S. federal estate and gift tax purposes) of the United States are subject to estate tax on all property that has a U.S. “situs.” Shares may well be considered to have a U.S. situs for these purposes. If they are, then Shares would be includible in the U.S. federal gross estate of an individual Non-U.S. Shareholder. Currently, U.S. federal estate tax is imposed at rates of up to 40% of the fair market value of the taxable estate. The U.S. federal estate tax rate is subject to change in future years. In addition, the U.S. federal “generation-skipping transfer tax” may apply in certain circumstances. The estate of an individual Non-U.S. Shareholder who is resident in a country that has an estate tax treaty with the United States may be entitled to benefit from such treaty. For individual Non-U.S. Shareholders, the U.S. federal gift tax generally applies only to gifts of tangible personal property or real property having a U.S. situs. Tangible personal property (including gold) has a U.S. situs if it is physically located in the United States. Although the matter is not settled, it appears that ownership of Shares should not be considered ownership of the underlying gold for this purpose, even to the extent that gold was held in custody in the United States. Instead, Shares should be considered intangible property, and therefore they should not be subject to U.S. federal gift tax if transferred during the holder’s lifetime. Individual Non-U.S. Shareholders are urged to consult their tax advisors regarding the possible application of U.S. federal estate, gift and generation-skipping transfer taxes in their particular circumstances. 17 Table of Contents Taxation in Jurisdictions Other than the United States Purchasers of Shares that are based in or acting out of a jurisdiction other than the United States are advised to consult his, her or its tax advisor as to the tax consequences under the laws of such jurisdiction (or any other jurisdiction not being the United States to which they are subject), of their purchase, holding, sale and redemption of or any other dealing in Shares and, in particular, as to whether any value added tax, other consumption tax or transfer tax is payable in relation to such purchase, holding, sale, redemption or other dealing. ERISA AND RELATED CONSIDERATIONS The Employee Retirement Income Security Act of 1974, as amended (“ERISA”), and Code section 4975 impose certain requirements on employee benefit plans and certain other plans and arrangements that are subject to ERISA or the Code section 4975, including IRAs and annuities, retirement plans for self-employed individuals (so-called “Keogh plans”), and certain collective investment funds and insurance company general or separate accounts in which such plans or arrangements are invested (collectively, the “Plans”), and on persons who are fiduciaries with respect to the investment of assets treated as “plan assets” of a Plan. Non-U.S. plans, government plans and some church plans are not subject to the fiduciary responsibility provisions of ERISA or the provisions of Code section 4975, but may be subject to substantially similar rules under state, federal or other law (“Similar Law”). In contemplating an investment of a portion of Plan assets in Shares, the Plan fiduciary responsible for making such investment should carefully consider, taking into account the facts and circumstances of the Plan, the “Risk Factors” discussed below and whether such investment is consistent with its fiduciary responsibilities, including, but not limited to (1) whether the fiduciary has the authority to make the investment under the appropriate governing plan instrument; (2) whether the investment would constitute a direct or indirect non-exempt “prohibited transaction” with a “party in interest” or “disqualified person,” as described in ERISA section 406 or Code section 4975, as applicable; (3) the Plan’s funding objectives; and (4) whether under the general fiduciary standards of investment prudence and diversification such investment is appropriate for the Plan, taking into account the overall investment policy of the Plan, the composition of the Plan’s investment portfolio, and the Plan’s need for sufficient liquidity to pay benefits when due.”