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Item 7. Management’s Discussion and Analysis

2023-04-13 compared with 2022-04-13 · 138 added, 113 removed, 193 unchanged (57% of the section changed)

Management’s Discussion and Analysis

of Financial Condition and Results of Operations

Management’s Discussion and

Analysis of Financial Condition and Results of Operations

This information should be read together with

the financial statements and notes to the financial statements included in this Report.

The discussion and analysis that follows may contain

forward-looking statements, such as those that relate to future events or future performance.

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.

Neither the Sponsor, nor any other person assumes responsibility for the accuracy or completeness of forward-looking

Except as required by applicable law, 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.

The discussion and analysis that follows may

contain forward-looking statements, such as those that relate to future events or future performance.

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.

Neither the Sponsor, nor any other person assumes responsibility for the accuracy or

completeness of forward-looking statements.

Except as required by applicable law, 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.

The Trust is an investment trust formed on May

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It does not have any officers, directors, or employees and is administered by the Trustee pursuant to the Trust Agreement.

not registered as an investment company under the Investment Company Act of 1940, as amended, and is not required to register under such

It will 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.

After consideration of Financial Accounting Standards Topic

946, however, the Sponsor has concluded the Trust meets the fundamental characteristics of an investment company.

In addition, while the

Trust does not currently possess all of the typical characteristics of an investment company, it believes its activities are consistent

with those of an investment company and will therefore apply the guidance in Financial Accounting Standards Topic 946, including disclosure

of the financial support contractually required to be provided by an investment company to any of its investees.

The Sponsor is responsible

for, among other things, overseeing the performance of the Trustee and the Trust’s principal service providers, including the preparation

of financial statements.

is not registered as an investment company under the Investment Company Act of 1940, as amended, and is not required to register under

It will 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.

After consideration of Financial Accounting Standards

Topic 946, however, the Sponsor has concluded the Trust meets the fundamental characteristics of an investment company.

while the Trust does not currently possess all of the typical characteristics of an investment company, it believes its activities are

consistent with those of an investment company and will therefore apply the guidance in Financial Accounting Standards Topic 946, including

disclosure of the financial support contractually required to be provided by an investment company to any of its investees.

is responsible for, among other things, overseeing the performance of the Trustee and the Trust’s principal service providers,

including the preparation of financial statements.

The Trustee is responsible for the day-to-day administration of the Trust.

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investors with an opportunity to invest in gold through the Shares and be able to take delivery of physical gold in exchange for their

The Trust’s secondary objective is for the Shares to reflect the performance of the price of gold less the expenses of the

Trust’s operations.

The Trust’s secondary objective is for the Shares to reflect the performance of the price of gold less the expenses of

the Trust’s operations.

The Trust is not actively managed.

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of Inception to January 31, 2023.

The 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.

Significant Accounting Policies

The 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.

Critical Accounting Policies

In preparing financial statements in conformity

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consist of allocated gold bullion and gold receivable;

representing gold covered by contractually binding orders for the creation of shares

where the gold has not yet been transferred to the Trust’s account and, from time to time, cash, which is used to pay expenses.

representing gold covered by contractually binding orders for the creation of

shares where the gold has not yet been transferred to the Trust’s account and, from time to time, cash, which is used to pay expenses.

London Gold Delivery Bars are held by the Custodian,

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assets less its estimated accrued but unpaid liabilities (which include accrued expenses).

The Trustee computes the NAV per Share by dividing

the net assets of the Trust by the number of the shares outstanding on the date the computation is made.

The Trustee computes the NAV per Share by

dividing the net assets of the Trust by the number of the shares outstanding on the date the computation is made.

In determining the Trust’s NAV, the Trustee

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most recently announced LBMA AM Gold Price or LBMA PM Gold Price.

Prior to March 20, 2015, the Trustee utilized the daily fix of the price

of a Fine Ounce of gold as performed by the five members of the London gold fix, which has now been replaced by the ICE Benchmark Administration

as an independent third-party administrator.

If the Sponsor determines that such price is inappropriate

to use, it shall identify an alternate basis for evaluation to be employed by the Trustee.

The Sponsor may instruct the Trustee to use

a different publicly available price which the Sponsor determines to fairly represent the commercial value of the Trust’s gold.

Prior to March 20, 2015, the Trustee utilized the daily fix of the

price of a Fine Ounce of gold as performed by the five members of the London gold fix, which has now been replaced by the ICE Benchmark

Administration as an independent third-party administrator.

If the Sponsor determines that such price is

inappropriate to use, it shall identify an alternate basis for evaluation to be employed by the Trustee.

The Sponsor may instruct the

Trustee to use a different publicly available price which the Sponsor determines to fairly represent the commercial value of the Trust’s

Beginning balance as of February 1, 2022

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Change in unrealized appreciation (depreciation)

(18,669,013 )

Ending balance as of January 31, 2023

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gold and certain related records maintained by the Custodian.

The Sponsor exercised its right to visit the Custodian’s

premises and inspect the Trust’s gold and related records most recently on September 03, 2021.

The Sponsor exercised its right to visit the

Custodian’s premises and inspect the Trust’s gold and related records most recently on August 22, 2022.

During the fiscal year that ended January 31,

Bureau Veritas Commodities UK Limited, a leading commodity inspection and testing company, conducted a physical gold audit of the Trust

on October 6, 2021.

Due to unprecedented social lock-down policies implemented in the UK to help prevent the spread of COVID-19,

Bureau Veritas was unable to perform a physical inspection of the Trust’s gold as of January 31, 2022.

As the UK lifted restrictions,

Bureau Veritas was able to conduct a physical gold audit of the Trust on February 23, 2022.

Shareholder Ownership

Merk Hard Currency Fund owned a market value of

$1,072,750 which equates to 0.18% ownership in the Trust at January 31, 2022.

The Sponsor acts as investment advisor to the Merk Hard

Currency Fund.

2023, Inspectorate International Limited, a leading commodity inspection and testing company, conducted a physical gold audit of the

Trust on February 23, 2022.

Due to rail strikes in the UK, Inspectorate was unable to perform a physical inspection of the Trust’s

gold on January 31, 2023.

Inspectorate was able to conduct a physical gold audit of the Trust on February 2, 2023.

Prospective Change in Pricing Index

The pricing index the Sponsor uses in relation

to the Shares issued by the Trust intends to change to reference the Solactive Index in lieu of the LBMA PM Gold Price.

Following the Index Change Date, in determining

the Trust’s NAV, the Trustee will value the gold held by the trust based on the Solactive Index.

Solactive will own, calculate,

and disseminate the Solactive Index.

The Solactive Index is a U.S.

Dollar denominated index that aims to provide a price fixing for the

gold spot price quoted as U.S.

Dollars per Troy Ounce and determined for the close of trading on the NYSE.

The Solactive Index calculates

gold bullion fixing prices by taking TWAP of XAU trading prices provided via IDS data feed.

Specifically, the Solactive Index uses a TWAP

calculation to determine an average price that is time-weighted, using Trade Ticks for two specified time periods around the scheduled

close of trading on the NYSE (generally, 4:00 PM Eastern Time).

The TWAP is derived for (1) the Time Period 1, which consists of the

five minutes before the close of trading, and (2) Time Period 2, which consists of the six seconds after the close of trading.

for Time Period 1 and Time Period 2 are then aggregated, with 90% weighting given to Time Period 1 and 10% weighting given to Time Period

2, to calculate the Solactive Index.

For any calculation day t , the Solactive

Index ( Index t ), is determined in accordance with the following formula:

The Solactive Index is calculated and published

by Solactive no later than 30 minutes following the close of trading on the NYSE, disseminated to major financial data providers, and

made publicly available via the Trust’s website.

The Solactive Index calculation is based on XAU

market data from IDS, which is a major provider of financial market data.

The data is available through IDS’s data streaming service,

which covers 2,700 spot rates and over 7,500 forwards and non-deliverable forwards, with an average of over 130 million updates per day

IDS compiles data from over 100 sources, including market makers, execution venues, banks and brokers from across the globe,

and every updating Trade Tick of spot streaming data is available via IDS’s Integrated Data Viewer service in a file-based format.

It is unlikely that, on any given trading day

for the Shares, there would be no Trade Ticks recorded for XAU in either Time Period 1 or Time Period 2, such that the Solactive Index

calculation could not be performed on such day.

Trade Ticks representing XAU are the closing prices for specific gold bullion transactions

posted in a 24-hour, global, over-the-counter gold bullion market, which is not subject to trading suspensions, trading halts, or market

However, in the unlikely event that IDS is unable to publish pricing information for XAU, for whatever reason, during either

Time Period 1 or Time Period 2 on a given trading day, the last available Solactive Index calculation will be used in accordance with

Solactive’s published and publicly available disruption policy.

If the Sponsor determines that such price is

inappropriate to use, it shall identify an alternate basis for evaluation to be employed by the Trustee.

The Sponsor may instruct the

Trustee to use a different publicly available price which the Sponsor determines to fairly represent the commercial value of the Trust’s

The Trustee’s estimation of accrued but

unpaid fees, expenses and liabilities will be conclusive upon all persons interested in the Trust, and no revision or correction in any

computation made under the Trust Agreement will be required by reason of any difference in amounts estimated from those actually paid.

The Sponsor and the investors may rely on any evaluation

or determination of any amount made by the Trustee, and except for any determination by the Sponsor as to the price to be used to evaluate

gold, the Sponsor will have no responsibility for the evaluation’s accuracy.

The determinations the Trustee makes will be made in

good faith upon the basis of, and the Trustee will not be liable for any errors contained in, information reasonably available to it.

The Trustee will not be liable to the Sponsor, Authorized Participants, the investors or any other person for errors in judgment.

the preceding liability exclusion will not protect the Trustee against any liability resulting from bad faith or gross negligence in the

performance of its duties.

The Sponsor will give 60 day notice of the Index Change

Date by issuing a press release and filing an 8-K.

Marketing Agent Agreement and Name Change

On October 22, 2015, the Sponsor and the Trustee

entered into a First Amendment To Depositary Trust Agreement (the “First Trust Amendment”), amending the Trust Agreement to

effectuate a change in the name of the Trust from “Merk Gold Trust” to “Van Eck Merk Gold Trust,” effective as

of October 26, 2015.

entered into a First Amendment To Depositary Trust Agreement (the “First Trust Amendment”), amending the Trust Agreement

to effectuate a change in the name of the Trust from “Merk Gold Trust” to “Van Eck Merk Gold Trust,” effective

as of October 26, 2015.

As a result of the name change, all references to “Merk Gold Trust” in the Trust Agreement were amended

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offered by the Trust are now known as the “VanEck Merk Gold Shares”.

Except for the name change effected pursuant to the Second

Trust Amendment, the Trust Agreement remains in full force and effect on its existing terms.

Except for the name change effected pursuant to the

Second Trust Amendment, the Trust Agreement remains in full force and effect on its existing terms.

Change in Settlement Cycle and Amendment to

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and redemption procedures are addressed in the Authorized Participant Agreements by among the Authorized Participants, the Trustee and

the Sponsor, the Trustee and the Sponsor exercised their rights to amend each such agreement to address the new T+2 settlement cycle and

executed First Amendments to each of the Authorized Participant Agreements, effective as of September 5, 2017, and provided timely notice

of such amendment to the Authorized Participants.

Except for the foregoing amendments, the Authorized Participant Agreements remain in

full force and effect on their existing terms.

the Sponsor, the Trustee and the Sponsor exercised their rights to amend each such agreement to address the new T+2 settlement cycle

and executed First Amendments to each of the Authorized Participant Agreements, effective as of September 5, 2017, and provided timely

notice of such amendment to the Authorized Participants.

Except for the foregoing amendments, the Authorized Participant Agreements remain

in full force and effect on their existing terms.

Review of Financial Results

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on January 31, 2022 to $656,592,798 on January 31, 2023, a 12% increase for the fiscal year.

The increase in the Trust’s NAV

resulted primarily from an increase in the number of Shares issued during the period, which rose from 24,366,372 Shares issued and outstanding

The increase in the Trust’s NAV resulted

primarily from an increase in the number of Shares issued during the period, which rose from 33,599,843 Shares issued and outstanding

on January 31, 2022 to 35,203,259 Shares issued and outstanding on January 31, 2023.

NAV per Share decreased 3.91% from $18.16 on January

31, 2021 to $17.45 on January 31, 2022.

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 $1,271,275 for the year, or 0.22% of the Trust’s net assets on an annualized

The NAV per Share of $18.52 on June 2, 2021 was

the highest during the year, compared with a low of $16.40 on March 30, 2021.

Net decrease in net assets resulting from operations

NAV per Share increased 6.88% from $17.45 on

January 31, 2022 to $18.65 on January 31, 2023.

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 $1,557,794 for the year, or 0.24% of the Trust’s net assets on

an annualized basis.

The NAV per Share of $19.81 on March 8, 2022

was the highest during the year, compared with a low of $15.80 on November 3, 2022.

Net increase in net assets resulting from operations

for the year ended January 31, 2023 was 31,614,263, resulting from a net realized gain of $1,178,406 from gold bullion distributed for

redemptions and a decrease in unrealized appreciation on gold of $18,669,013 and by the Sponsor’s Fee of $1,271,275.

redemptions and an increase in unrealized appreciation on gold of $31,993,651 and by the Sponsor’s Fee of $1,557,794.

the Sponsor’s Fee, the Trust had no expenses during the year ended January 31, 2023.

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The Trust’s NAV increased from $442,483,105

on January 31, 2020 to $442,483,105 on January 31, 2021, an 122.9% increase for the fiscal year.

on January 31, 2021 to $586,245,772 on January 31, 2022, a 32.49% increase for the fiscal year.

The increase in the Trust’s NAV

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on January 31, 2021 to 33,599,843 Shares issued and outstanding on January 31, 2022.

NAV per Share increased 17.3% from $15.48 on January

31, 2020 to $18.16 on January 31, 2021.

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 $1,013,291 for the year, or 0.30% of the Trust’s assets on an annualized

The NAV per Share of $20.17 on August 06, 2020

was the highest during the year, compared with a low of $14.40 on March 19, 2020.

Net increase in net assets resulting from operations

NAV per Share decreased 3.91% from $18.16 on

January 31, 2021 to $17.45 on January 31, 2022.

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 $1,271,275 for the year, or 0.22% of the Trust’s net assets on

an annualized basis.

The NAV per Share of $18.52 on June 2, 2021 was

the highest during the year, compared with a low of $16.40 on March 30, 2021.

Net decrease in net assets resulting from operations

for the year ended January 31, 2022 was 18,183,432, resulting from a net realized gain of $1,756,856 from gold bullion distributed for

redemptions and an increase in unrealized appreciation on gold of $32,005,146 and by the Sponsor’s Fee of $1,013,291.

redemptions and a decrease in unrealized appreciation on gold of $18,669,013 and by the Sponsor’s Fee of $1,271,275.

the Sponsor’s Fee, the Trust had no expenses during the year ended January 31, 2022.

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on a percentage basis due to the Sponsor’s Fee, which was $1,013,291 for the year, or 0.30% of the Trust’s assets on an annualized

The NAV per Share of $15.48 on January 31, 2020

was the highest during the year, compared with a low of $12.45 on April 23, 2019.

The NAV per Share of $20.17 on August 06, 2020

was the highest during the year, compared with a low of $14.40 on March 19, 2020.

Net increase in net assets resulting from operations

for the year ended January 31, 2020 was $29,740,427, resulting from a net realized gain of $96,601 from gold bullion distributed for redemptions

and an increase in unrealized appreciation on gold of $30,303,992 and by the Sponsor’s Fee of $660,166.

Other than the Sponsor’s

Fee, the Trust had no expenses during the year ended January 31, 2020.

For the calendar year ended December 31, 2018,

the Marketing Agent earned a fee of $26,490.

For the calendar year ended December 31, 2019, the Marketing Agent earned a fee of $36,640.

The total fees earned by the Marketing Agent since the initiation of the Marketing Agent’s efforts through December 31, 2019 are

$73,405, which at that time represented 0.3621% of the Maximum Fee potentially payable to the Marketing Agent pursuant to the Marketing

Agent Agreement.

The fee earned in a calendar quarter is paid in the subsequent calendar quarter.

Comparison of the Fiscal Years Ended January

31, 2019 and 2018

The Trust’s NAV increased from $142,168,245

on January 31, 2018 to $154,177,917 on January 31, 2019, an 8.45% increase for the fiscal year.

The increase in the Trust’s NAV

resulted primarily from an increase in the number of Shares issued during the period, which rose from 10,727,887 Shares issued and outstanding

on January 31, 2018 to 11,873,295 Shares issued and outstanding on January 31, 2019.

NAV per Share decreased 1.96% from $13.25 on January

31, 2018 to $12.99 on January 31, 2019.

The Trust’s NAV per Share fell slightly more than the price per Ounce of gold on a percentage

basis due to the Sponsor’s Fee, which was $563,414 for the year, or 0.40% of the Trust’s assets on an annualized basis.

The NAV per Share of $13.32 on February 15, 2018

was the highest during the year, compared with a low of $11.58 on August 17, 2018.

Net decrease in net assets resulting from operations

for the year ended January 31, 2019 was $2,907,415, resulting from a net realized loss of $148,638 from gold bullion distributed for redemptions

and a decrease in unrealized appreciation on gold of $2,195,363 and by the Sponsor’s Fee of $563,414.

Other than the Sponsor’s

Fee, the Trust had no expenses during the year ended January 31, 2019.

for the year ended January 31, 2021 was $38,317,217, resulting from a net realized gain of $7,325,362 from gold bullion distributed for

redemptions and an increase in unrealized appreciation on gold of $32,005,146 and by the Sponsor’s Fee of $1,013,291.

the Sponsor’s Fee, the Trust had no expenses during the year ended January 31, 2021.

For the calendar year ended December 31, 2019,

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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