1450923--3/31/2010--ETFS_Gold

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The value of the Shares relates directly to the value of the gold held by the Trust and fluctuations in the price of gold could materially adversely affect an investment in the Shares. The Shares may trade at a price which is at, above or below the NAV per Share and any discount or premium in the trading price relative to the NAV per Share may widen as a result of non-concurrent trading hours between the NYSE Arca and London, Zurich and COMEX. Purchasing activity in the gold market associated with the purchase of Baskets from the Trust may cause a temporary increase in the price of gold. This increase may adversely affect an investment in the Shares. The Shares and their value could decrease if unanticipated operational or trading problems arise. If the process of creation and redemption of Baskets encounters any unanticipated difficulties, the possibility for arbitrage transactions intended to keep the price of the Shares closely linked to the price of gold may not exist and, as a result, the price of the Shares may fall. The liquidity of the Shares may be affected by the withdrawal from participation of one or more Authorized Participants. Shareholders do not have the protections associated with ownership of shares in an investment company registered under the Investment Company Act of 1940 or the protections afforded by the CEA. The Trust may be required to terminate and liquidate at a time that is disadvantageous to Shareholders. The lack of an active trading market for the Shares may result in losses on investment at the time of disposition of the Shares. Shareholders do not have the rights enjoyed by investors in certain other vehicles. An investment in the Shares may be adversely affected by competition from other methods of investing in gold. The price of gold may be affected by the sale of ETVs tracking gold markets. Crises may motivate large-scale sales of gold which could decrease the price of gold and adversely affect an investment in the Shares. Several factors may have the effect of causing a decline in the prices of gold and a corresponding decline in the price of Shares. Among them: The Trust s gold may be subject to loss, damage, theft or restriction on access. The Trust s lack of insurance protection and the Shareholders limited rights of legal recourse against the Trust, the Trustee, the Sponsor, the Custodian, any Zurich Sub-Custodian and any other sub-custodian exposes the Trust and its Shareholders to the risk of loss of the Trust s gold for which no person is liable. The Custodian s limited liability under the Custody Agreements and English law may impair the ability of the Trust to recover losses concerning its gold and any recovery may be limited, even in the event of fraud, to the market value of the gold at the time the fraud is discovered. The obligations of the Custodian, the Zurich Sub-Custodian and any other subcustodians are governed by English law, which may frustrate the Trust in attempting to receive legal redress against the Custodian, the Zurich Sub-Custodian or any subcustodian concerning its gold. Although the relationship between the Custodian and the Zurich Sub-Custodian concerning the Trust s allocated gold is expressly governed by English law, a court hearing any legal dispute concerning that arrangement may disregard that choice of law and apply Swiss law, in which case the ability of the Trust to seek legal redress against the Zurich Sub-Custodian may be frustrated. The Trust may not have adequate sources of recovery if its gold is lost, damaged, stolen or destroyed. Shareholders and Authorized Participants lack the right under the Custody Agreements to assert claims directly against the Custodian, the Zurich Sub-Custodian and any subcustodian. The Custodian is reliant on the Zurich Sub-Custodian for the safekeeping of all or a substantial portion of the Trust s gold. Furthermore, the Custodian has limited obligations to oversee or monitor the Zurich Sub-Custodian. As a result, failure by any Zurich Sub-Custodian to exercise due care in the safekeeping of the Trust s gold could result in a loss to the Trust. The Custodian relies on its Zurich Sub-Custodian to hold the gold allocated to the Trust Allocated Account and used to settle redemptions. As a result, settlement of gold in connection with redemptions loco London may require more than three days. Because neither the Trustee nor the Custodian oversees or monitors the activities of subcustodians who may hold the Trust s gold, failure by the subcustodians to exercise due care in the safekeeping of the Trust s gold could result in a loss to the Trust. The obligations of any subcustodian of the Trust s gold are not determined by contractual arrangements but by LBMA rules and London bullion market customs and practices, which may prevent the Trust s recovery of damages for losses on its gold custodied with subcustodians. Gold bullion allocated to the Trust in connection with the creation of a Basket may not meet the London Good Delivery Standards and, if a Basket is issued against such gold, the Trust may suffer a loss. Gold held in the Trust s unallocated gold account and any Authorized Participant s unallocated gold account is not segregated from the Custodian s assets. If the Custodian becomes insolvent, its assets may not be adequate to satisfy a claim by the Trust or any Authorized Participant. In addition, in the event of the Custodian s insolvency, there may be a delay and costs incurred in identifying the bullion held in the Trust s allocated gold account. In issuing Baskets, the Trustee relies on certain information received from the Custodian which is subject to confirmation after the Trustee has relied on the information. If such information turns out to be incorrect, Baskets may be issued in exchange for an amount of gold which is more or less than the amount of gold which is required to be deposited with the Trust. The sale of the Trust s gold to pay expenses not assumed by the Sponsor at a time of low gold prices could adversely affect the value of the Shares. The value of the Shares will be adversely affected if the Trust is required to indemnify the Sponsor or the Trustee under the Trust Agreement.

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1450923--3/31/2010--ETFS_Gold_Trust