10-Q: GraniteShares Gold Trust NAV Rises Amidst Gold Price Surge in Q2 2024

GraniteShares Gold Trust reports an increase in net asset value driven by rising gold prices during the quarter ended December 31, 2023.

Summary

• GraniteShares Gold Trust's net asset value increased by 8.71% during the quarter ended December 31, 2023, reaching $960.48 million.
• This increase was primarily driven by a 10.26% rise in the price of gold, from $1,870.50 to $2,062.40 per ounce.
• The number of shares outstanding decreased from 47,750,000 to 47,100,000 due to net redemptions.
• Net increase in net assets resulting from operations for the quarter was $89.57 million.
• For the six months ended December 31, 2023, the Trust's net asset value increased by 2.64%.
• The net asset value per share increased by 7.77% from $18.92 at June 30, 2023, to $20.39 at December 31, 2023.
• The Sponsor's fees for the six-month period were $815,309.
• Net increase in net assets resulting from operations for the six months was $69.18 million.

Sentiment

Score: 7

Explanation: The sentiment is moderately positive due to the increase in net asset value driven by rising gold prices, but tempered by the decrease in shares outstanding due to redemptions and the impact of sponsor fees.

Positives

• The Trust's net asset value increased due to the rising price of gold.
• The Trust maintains a simple and cost-effective means of investing in gold.
• The Sponsor assumes most of the expenses incurred by the Trust, limiting its ordinary expenses to the Sponsor's fee.
• The Trust's disclosure controls and procedures were effective as of the end of the period covered by the report.

Negatives

• The number of shares outstanding decreased due to redemptions, partially offsetting the positive impact of rising gold prices.
• The Sponsor's fees slightly reduced the net asset value per share increase compared to the percentage increase in the price of gold.

Risks

• The price of gold is subject to various factors, including global supply and demand, inflation expectations, currency exchange rates, and geopolitical events.
• A decline in the price of gold would proportionately decrease the value of an investment in the Shares.
• The Trust's sole business activity is the investment in gold bullion, making it susceptible to fluctuations in the gold market.

Future Outlook

The Trust aims to reflect the performance of the price of gold, less the Trust's expenses.

Industry Context

This announcement reflects the performance of a gold-backed ETF, which is directly tied to the price of gold and investor sentiment towards precious metals as a safe-haven asset.

Comparison to Industry Standards

• Comparable gold-backed ETFs include GLD (SPDR Gold Trust) and IAU (iShares Gold Trust).
• The expense ratio of BAR (GraniteShares Gold Trust) is 0.1749%, which is competitive compared to GLD (0.40%) and IAU (0.25%).
• The performance of BAR is expected to closely track the LBMA Gold Price PM, similar to other gold-backed ETFs.

Related Party Transactions

• A fee is paid to the Sponsor as compensation for services performed under the Trust Agreement.
• Affiliates of the Trustee may from time-to-time act as Authorized Participants or purchase or sell gold or Shares for their own account.

Stakeholder Impact

• Shareholders benefit from the increased net asset value per share due to rising gold prices.
• Authorized Participants are involved in the creation and redemption of shares, impacting the Trust's share count.
• The Sponsor receives fees for managing the Trust, impacting its profitability.

Key Dates

Keywords

GraniteShares Gold Trust, Gold ETF, Gold Bullion, Net Asset Value, BAR, Financial Results, Gold Price, Authorized Participants, Redemptions, Creations