2 - Summary of Significant Accounting Policies

A.	Basis of Accounting

The following is a summary of significant accounting policies consistently followed by the Trust in the preparation of its financial statements in conformity with U.S. GAAP. The preparation of financial statements in conformity with U.S. GAAP requires management to make certain estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates and these differences could be material.

B.	Gold Bullion

JPMorgan Chase Bank N.A., London branch (the "Custodian"), is responsible for the safekeeping of gold bullion owned by the Trust.

For financial statement purposes, the gold bullion held by the Trust is valued at the lower of cost or market, using the average cost method. Should the market value of the gold bullion held be lower than its average cost during the interim periods of the same fiscal year, an adjustment of value below cost ("market value reserve") is recorded by the Trust. Should the market value of the gold bullion held increase subsequent to the market value reserve being recorded, a "market value recovery" is recorded by the Trust. Gain or loss on sales of gold bullion is calculated on a trade date basis. Fair value of the gold bullion is based on the price of gold fixed in the afternoon of each working day (London time) by the London Gold Market Fixing Ltd. ("London PM Fix"). Prior to December 9, 2010, the fair value of the gold bullion was based on the Commodity Exchange, Inc. ("COMEX") settlement price for the spot month gold futures contract, which at any time is the contract then closest to maturity. The change in price to the London PM Fix from the COMEX settlement price was due to the London PM Fix being a more widely followed and recognized benchmark for the price of gold.

The following table summarizes activity in gold bullion for the three months ended September 30, 2011 (all balances in 000's):


	Ounces			Average Cost			Fair Value			Realized Gain (Loss)
Beginning balance		4,638.6		$	4,978,476		$	6,983,435		$	—
Gold contributed		847.7			1,409,816			1,409,816			—
Gold distributed		(219.1	)		(254,552	)		(375,194	)		120,642
Gold sold		(3.0	)		(3,372	)		(4,991	)		1,619
Adjustment for realized gain		—			—			122,261			—
Adjustment for unrealized gain on gold bullion		—			—			392,743			—

Ending balance		5,264.2		$	6,130,368		$	8,528,070		$	122,261

The following table summarizes activity in gold bullion for the nine months ended September 30, 2011 (all balances in 000's):


	Ounces			Average Cost			Fair Value			Realized Gain (Loss)
Beginning balance		3,783.0		$	3,568,036		$	5,317,017		$	—
Gold contributed		2,033.5			3,139,985			3,139,985			—
Gold distributed		(544.4	)		(569,456	)		(819,772	)		250,316
Gold sold		(7.9	)		(8,197	)		(11,981	)		3,784
Adjustment for realized gain		—			—			254,100			—
Adjustment for unrealized gain on gold bullion		—			—			648,721			—

Ending balance		5,264.2		$	6,130,368		$	8,528,070		$	254,100

C.	Redeemable Capital Shares

Shares of the Trust are classified as "redeemable" for balance sheet purposes, since they are subject to redemption. Trust Shares are issued and redeemed continuously in aggregations of 50,000 Shares in exchange for gold bullion rather than cash. Individual investors cannot purchase or redeem Shares in direct transactions with the Trust. The Trust only transacts with registered broker-dealers eligible to settle securities transactions through the book-entry facilities of the Depository Trust Company and which have entered into a contractual arrangement with the Trust and the Sponsor governing, among other matters, the creation and redemption of Shares (such broker-dealers, the "Authorized Participants"). Holders of Shares of the Trust may redeem their Shares at any time acting through an Authorized Participant and in the prescribed aggregations of 50,000 Shares; provided, that redemptions of Shares may be suspended during any period while regular trading on NYSE Arca, Inc. ("NYSE Arca") is suspended or restricted, or in which an emergency exists as a result of which delivery, disposal or evaluation of gold is not reasonably practicable.

The per Share amount of gold exchanged for a purchase or redemption is calculated daily by the Trustee, using the London PM Fix to calculate the gold amount in respect of any liabilities for which covering gold sales have not yet been made, and represents the per Share amount of gold held by the Trust, after giving effect to its liabilities, sales to cover expenses and liabilities and any losses that may have occurred.

When gold is exchanged in settlement of a redemption, it is considered a sale of gold for financial statement purposes.

Due to the expected continuing sales and redemption of capital stock and the three-day period for Share settlement, the Trust reflects capital Shares sold as a receivable, rather than as contra equity. Shares redeemed are reflected as a contra asset on the trade date. Outstanding Trust Shares are reflected at redemption value, which is the net asset value per Share at the period ended date. Adjustments to redemption value are reflected in shareholders' equity.

Net asset value is computed by deducting all accrued fees, expenses and other liabilities of the Trust, including the Sponsor's fees, from the fair value of the gold bullion held by the Trust.

Activity in redeemable capital Shares was as follows (all balances in 000's):


	Three Months Ended September 30, 2011						Nine Months Ended September 30, 2011
	Shares			Amount			Shares			Amount
Beginning balance		475,050		$	6,982,009			386,950		$	5,315,950
Shares issued		86,850			1,409,816			208,250			3,139,985
Shares redeemed		(22,450	)		(375,194	)		(55,750	)		(819,772	)
Redemption value adjustment		—			509,465			—			889,933

Ending balance		539,450		$	8,526,096			539,450		$	8,526,096