Investment in Gold Bullion is Considered Speculative

Investment in gold bullion is considered speculative. Gold bullion prices can be influenced by a variety of global economic, financial, and political factors and may fluctuate substantially over short periods of time and be more volatile than other types of investments. Economic, political, or other conditions affecting one or more of the major sources of gold bullion could have a substantial effect on supply and demand in countries throughout the world. The market for gold bullionis relatively limited and is unregulated. Additionally, the majority of gold bullion producers are concentrated in countries that have the potential for instability. Economic and political conditions in those countries may have a direct effect on the production and marketing of gold bullion and on sales of central bank holdings of gold bullion, if any. The price of gold bullion has fluctuated widely over the past several years and may be affected by global gold bullion supply and demand, which is influenced by such factors as forward selling by gold bullion producers, purchases made by gold bullion producers to unwind gold bullion hedge positions, central bank gold bullion purchases and sales, and production and cost levels in major gold bullion producing countries; 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.

Gold bullion does not generate income, unless loaned and its returns are from gains or losses realized upon sale. Investments in gold bullion can present concerns such as delivery, storage, and maintenance, possible illiquidity, and the unavailability of accurate market valuations. Furthermore, gold bullion investors may encounter storage and transaction costs in connection with their ownership of gold bullion that may be higher than the costs attendant to the purchase, holding, and disposition of securities of companies engaged in gold bullion related businesses. The price of gold bullion, however, is less subject to local and company specific factors than securities of individual companies engaged in gold bullion related businesses. As a result, gold bullion may be more or less volatile in price than securities of companies engaged in gold bullion related businesses. There is no assurance that gold bullionwill maintain its long term value in terms of purchasing power in the future.