New York, NY (PRWEB) March 19, 2015
London Gold Market Fixing Ltd. has announced its intention to discontinue the "London Fix" pricing benchmark for Gold after March 19, 2015. The London Fix has been the "Benchmark Price" for valuation of gold bullion held by the Merk Gold Trust (NYSE Area: OUNZ) (the "Trust"). The London Bullion Market Association has accepted a proposal by ICE Benchmark Administration (“IBA") to operate a replacement gold price benchmark mechanism. Commencing March 20, 2015, IBA will operate an electronic, tradable and auditable, over-the-counter auction to establish and publish a fixed price for a troy ounce of gold twice each trading day at 10:30 a.m. London time (the ''LBMA AM Gold Price") and 3:00 p.m. London time (the “LBMA PM Gold Price”).
Merk Investments LLC, the sponsor of the Merk Gold Trust (the "Sponsor"), anticipates that, commencing March 20, 2015, the Sponsor will determine that the current London Fix, which will have ceased to be published as of March 19, 2015, is an inappropriate basis for valuing gold bullion received upon purchase of the Trust’s shares, delivered upon redemption of the Trust’s shares and otherwise held by the Trust on a daily basis, and that the LBMA PM Gold Price is an appropriate alternative for determining the value of the Trust’s gold each trading day. The Sponsor also expects to determine that the LBMA PM Gold Price will fairly represent the commercial value of gold bullion held by the Trust and, effective 60 days after the delivery of notice of such determination to The Depository Trust Company, the registered owner of the shares of the Trust, the "Benchmark Price" (as defined in each Trust’s Depository Trust Agreement) as of any day will be the LBMA PM Gold Price for such day.
The Merk Gold Trust is not an investment company registered under the Investment Company Act of 1940 or a commodity pool for purposes of the Commodity Exchange Act. Shares of the Trusts are not subject to the same regulatory requirements as mutual funds. These investments are not suitable for all investors. Please read the prospectus carefully before investing.
The value of the Shares relates directly to the value of the precious metal held by the Trusts and fluctuations in the price could materially adversely affect an investment in the Shares. Several factors may affect the price of precious metals, including:
- A change in economic conditions, such as a recession, can adversely affect the price of the precious metal held by the Trusts. Some metals are used in a wide range of industrial applications, and an economic downturn could have a negative impact on its demand and, consequently, its price and the price of the Shares;
- Investors' expectations with respect to the rate of inflation;
- Currency exchange rates; Interest rates;
- Investment and trading activities of hedge funds and commodity funds; and
- Global or regional political, economic or financial events and situations. Should there be an increase in the level of hedge activity of the precious metal held by the Trusts or producing companies, it could cause a decline in world precious metal prices, adversely affecting the price of the Shares.
Also, should the speculative community take a negative view towards the precious metal held by the Trust, it could cause a decline in prices, negatively impacting the price of Shares.
There is a risk that part or all of the Trusts' physical precious metal could be lost, damaged or stolen. Failure by the Custodian or Sub-Custodian to exercise due care in the safekeeping of the precious metal held by the Trust could result in a loss to the Trust.
The Trust has a limited operating history.
Commodities generally are volatile and are not suitable for all investors. Trusts focusing on a single commodity generally experience greater volatility.
This material must be preceded or accompanied by a prospectus. Before investing you should carefully consider the Fund’s investment objectives, risks, charges and expenses. This and other information is in the prospectus, a copy of which is available at http://www.merkgold.com/prospectus. Please read the prospectus carefully before investing.
Shares in the Trusts are not FDIC insured and may lose value and have no bank guarantee.
Investors buy and sell shares on a secondary market (i.e., not directly from Trust). Only market makers or "authorized participants" may trade directly with the Trust, typically in blocks of 50k to 100k shares.
The request for redemption of shares for gold is subject to a number of risks including but not limited to the potential for the price of gold to decline during the time between the submission of the request and delivery. Delivery may take considerable time depending on your location.
An investment in the trust does not constitute a direct investment in the underlying metal. Foreside Fund Services, LLC is the marketing agent for the Trust.
For further discussion of the risks associated with an investment in the Trusts please read the prospectus.