Here are some frequently asked questions about SPDR® Gold Shares. Click on the links to jump to the answers in the page.
- Can you take physical possession of the gold?
- Is the gold insured?
- Where is the gold held? Is it safe?
- What happens to the gold if there is a terrorist attack and it is stolen or damaged?
- Where do you get the spot price for gold?
- How do I find the intra-day NAV of SPDR® Gold Shares?
- How often is the trust audited, & do the auditors have access to the vault to physically count the gold?
1. Can you take physical possession of the gold?
The Trustee, BNY Mellon Asset Servicing, does not deal directly with the public. The trust handles creation and redemption orders for the shares with Authorized Participants, who deal in blocks of 100,000 shares. An individual investor wishing to exchange shares for physical gold would have to come to the appropriate arrangements with his or her broker.
2. Is the gold insured?
The Custodian, HSBC Bank (USA), NA, will maintain such insurance for its business, including its bullion and custody business, as it deems appropriate. The Trustee and the Sponsor, WGTS, may review this insurance coverage periodically and upon notice, subject to confidentiality restrictions. The Custodian is responsible for the safekeeping of the gold held on behalf of the Trust in accordance with the terms of the Allocated Bullion Account Agreement and is required to exercise reasonable care in the performance of its obligations. The Custodian is responsible for loss or damage suffered by the Trust as a direct result of any negligence, fraud, or willful default in the performance of its duties. The Custodian’s liability is only for the market value of the gold held in the Trust Allocated Account or Trust Unallocated Account, respectively, at the time such negligence, fraud or willful default is discovered by the Custodian, provided that the Custodian notifies the Trustee promptly of its discovery.
3. Where is the gold held? Is it safe?
The gold that underlies Gold Shares is held in the form of allocated 400 oz. London Good Delivery Bars in the London vaults of HSBC Bank (USA), NA. The safekeeping methods are essentially no different from those that have operated without a problem in the London market for centuries. Those safeguards have stood the test of time for both individuals and institutions (including many governments) that store their gold in London vaults. We have tremendous confidence in the Custodian's efforts to ensure the safety of the Trust's gold bullion.
4. What happens to the gold if there is a terrorist attack and it is stolen or damaged?
Though damage or loss as a result of such events is unlikely, should the gold be destroyed or damaged in a terrorist attack, the Custodian is not liable for any delay in performance or non-performance of any of its obligations under the Custody Agreements. See "Force Majeure" section of the prospectus. Should the gold in the Trust Allocated Account or Trust Unallocated Account be stolen or damaged, the Custodian would only be liable for the market value of the gold held in the Trust Allocated Account or Trust Unallocated Account if it were determined that such loss or damage were the result of negligence, fraud or willful default. These are the legal considerations governing the operations of the Custodian. Actual experience in the aftermath of the terrorist attack that destroyed the World Trade Center in New York was that there was effectively no disruption to the operations of a custodian whose vault was unavailable for months, until it was eventually recovered undamaged. The Custodian was able to carry on more or less normal operations by using gold deposited at other locations, or by borrowing gold in the market, and did not have to default on a single transaction.
5. Where do you get the spot price for gold? How does it relate to the London AM/PM Fix? What is the difference between the London Fix and COMEX?
The spot price for gold is determined by market forces in the 24-hour global over-the-counter (OTC) market for gold. The OTC market accounts for most global gold trading, and prices quoted reflect the information available to the market at any given time. The spot price can be found on: www.thebulliondesk.com*. The London Bullion Market Association has about 60 full members, as well as a lot of associates. The London Fix is set by five of those member firms and is based upon actual buy and sell orders for gold in the global OTC market. A good analogy for the London Fix versus OTC trading would be to consider the London Fixes similar to opening/closing prices for stocks and to consider the spot price for gold as the continuous market price throughout the trading day. The COMEX division of the New York Merantile Exchange is a derivatives exchange that acts as a marketplace to trade futures and options contracts on metals, including gold. Typically, gold futures contracts trade at a premium to the spot price. Further discussion can be found in the prospectus.
6. How do I find the intra-day NAV of "SPDR® Gold Shares"?
The indicative intra-day NAV of "SPDR® Gold Shares" can be found at www.spdrgoldshares.com. The indicative intra-day value is calculated on the mid point of the bid/offer gold spot price.
7. How often is the trust audited, and do the auditors have access to the vault to physically count the gold?
Agreements among the Trustee, BNY Mellon Asset Servicing and the Custodian, HSBC Bank (USA), NA allow for the Trustees to visit and inspect the Trust’s holdings of gold held by the custodian twice a year. In addition, The Trust’s independent auditors may audit the Gold holdings in the vault as part of their audit of the Financial Statements of the Trust.
For more information contact: State Street Global Advisors Asia Limited, 68/F Two International Finance Centre, 8 Finance Street, Central, Hong Kong, tel 1 800 2255 749 in Hong Kong or +852 2103 0100, www.ssga.com*
* These websites are not authorised by the Securities and Futures Commission ("SFC"), and may contain information relating to investment funds which are not authorised by the SFC.