REPORT OF INDEPENDENT AUDITORS


Unitholders, Trustee and Sponsor
United States Gold Trust


We have audited the  accompanying  statements of assets and  liabilities  of the
Bullion  Portfolio and the Coin Portfolio,  comprising United States Gold Trust,
as of December 31, 1997 and 1996,  including the schedules of  investments as of
December 31, 1997,  and the related  statements of operations and changes in net
assets for each of the three years in the period ended December 31, 1997 and the
selected  per unit data and  ratios  for each of the  years  since  1993.  These
financial  statements and per unit data and ratios are the responsibility of the
Trust's  management.  Our  responsibility  is to  express  an  opinion  on these
financial statements and per unit data and ratios based on our audits.

We  conducted  our  audits  in  accordance  with  generally   accepted  auditing
standards.  Those standards require that we plan and perform the audit to obtain
reasonable  assurance  about whether the financial  statements and per unit data
and ratios are free of material misstatement.  An audit includes examining, on a
test basis,  evidence  supporting  the amounts and  disclosures in the financial
statements.  Our procedures included  confirmation of investments as of December
31, 1997 and 1996, by correspondence with the custodian.  An audit also includes
assessing the  accounting  principles  used and  significant  estimates  made by
management,  as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.

In our opinion,  the financial  statements and selected per unit data and ratios
referred to above  present  fairly,  in all  material  respects,  the  financial
position of the Bullion  Portfolio  and the Coin  Portfolio,  comprising  United
States  Gold  Trust,  at  December  31,  1997 and  1996,  the  results  of their
operations  and  changes in their net assets for each of the three  years in the
period  ended  December  31, 1997 and the  selected per unit data and ratios for
each of the years since 1993, in conformity with generally  accepted  accounting
principles.

                                                               ERNST & YOUNG LLP

Chicago, Illinois
March 27, 1998

<PAGE>

























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<PAGE>

                            UNITED STATES GOLD TRUST
                      STATEMENTS OF ASSETS AND LIABILITIES

<TABLE>
<CAPTION>
                                             Bullion Portfolio                Coin Portfolio
                                       ----------------------------      ---------------------------
                                                December 31                     December 31
                                       ----------------------------      ---------------------------
                                           1997            1996             1997             1996
                                       -----------      -----------      -----------     -----------

ASSETS
<S>                                     <C>             <C>              <C>             <C>
Investments, at value
  (based on bid side evaluation)
  (cost:  $1,946,034; $2,092,158;
   $2,819,351 and $3,173,783,
   respectively)
  Gold Bullion                         $ 1,544,419      $ 2,127,172      $         -     $         -
  American Eagle Gold Coins                      -                -        2,240,736       3,222,138
Cash                                         9,633           42,264                -               -
                                       -----------      -----------      -----------     -----------
  Total Assets                           1,554,052        2,169,436        2,240,736       3,222,138

LIABILITIES

Bank overdraft                                   -                -           43,724          13,292
Payable to Sponsor                           3,645            4,620            5,274           7,864
Payable to Trustee                           2,500            2,500            2,682           3,932
Other accrued liabilities                      486            1,338            1,684           4,560
                                       -----------      -----------      -----------     -----------
  Total Liabilities                          6,631            8,458           53,364          29,648
                                       -----------      -----------      -----------     -----------

NET ASSETS                             $ 1,547,421      $ 2,160,978      $ 2,187,372     $ 3,192,490
                                       ===========      ===========      ===========     ===========
INTEREST OF UNITHOLDERS

Outstanding Units                          136,589          148,946          192,084         218,383
                                       ===========      ===========      ===========     ===========
Redemption Price per Unit
  (based on bid side evaluation)       $     11.33      $     14.51      $     11.39     $     14.62
                                       ===========      ===========      ===========     ===========
Calculation of Offering Price per Unit:
  Aggregate offering side evaluation   $ 1,560,291      $ 2,174,810      $ 2,220,759     $ 3,230,141
                                       ===========      ===========      ===========     ===========

    Divided by outstanding Units       $     11.42      $     14.60      $     11.56     $     14.79

  Plus sales charge of 1.96% of Offering
    Price (2% of net amount invested)          .23              .29              .23             .30
                                       -----------      -----------      -----------     -----------

Offering Price per Unit                $     11.65      $     14.89      $     11.79     $     15.09
                                       ===========      ===========      ===========     ===========
</TABLE>

                            See accompanying notes.

<PAGE>
<TABLE>
                            UNITED STATES GOLD TRUST
                            SCHEDULE OF INVESTMENTS
                               December 31, 1997
                               Bullion Portfolio
<CAPTION>
                                        Net Weight                       Value
       Refiner                      (Fine troy ounces)      (based on bid side evaluation)
---------------------               ------------------      ------------------------------
<S>                                     <C>                         <C>
ASARCO                                     95.912                    $    27,622
CREDIT SUISSE                              99.500                         28,656
DEGUSSA                                   300.557                         86,560
ENGELHARD                               2,285.774                        658,303
HANDY & HARMAN                            592.096                        170,524
JOHNSON & MATTHEY                         898.162                        258,671
MATTHEY BISHOP, USA                       199.562                         57,474
PAMP-SUISSE                               796.000                        229,248
PMR                                        95.002                         27,361
                                        ---------                    -----------
Total (identified cost $1,946,034)      5,362.565                    $ 1,544,419
                                        =========                    ===========

</TABLE>





                            See accompanying notes.


<PAGE>
<TABLE>
                            UNITED STATES GOLD TRUST
                            SCHEDULE OF INVESTMENTS
                               December 31, 1997
                                 Coin Portfolio
<CAPTION>
                                                                          Value
                                            Coins             (based on bid side evaluation)
                                          --------            ------------------------------
<S>                                        <C>                          <C>
American Eagle gold coins, one ounce
 (fine weight), $50 denomination
 (identified cost $2,819,351)              7,588                         $2,240,736
                                           =====                         ==========
</TABLE>





                            See accompanying notes.



<PAGE>

                            UNITED STATES GOLD TRUST
                            STATEMENTS OF OPERATIONS


<TABLE>
<CAPTION>
                                                    Bullion Portfolio                                Coin Portfolio
                                       --------------------------------------------      ------------------------------------------

                                                Year Ended December 31                           Year Ended December 31
                                       --------------------------------------------      ------------------------------------------
                                           1997            1996            1995             1997            1996            1995
                                       -----------      -----------     -----------      -----------     -----------    -----------
<S>                                    <C>              <C>             <C>              <C>             <C>            <C>
Expenses (Note 3):
  Trustee fees                         $     2,500      $     2,500     $     2,718      $     2,682     $     3,932    $     4,469
  Sponsor fees                               3,645            4,620           5,435            5,274           7,864          8,938
  Gold storage fees                          2,293            3,090           3,530            3,284           5,163          5,642
  Professional fees                          4,650            4,500           4,500            4,650           4,500          4,500
  Other                                        500              500             500              500             500            500
                                       -----------      -----------     -----------      -----------     -----------    -----------
  Total expenses                            13,588           15,210          16,683           16,390          21,959         24,049
  Less: amount waived or
    absorbed by Sponsor                      6,956            6,829           6,655            6,796           7,694          7,554
                                       -----------      -----------     -----------      -----------     -----------    -----------

Net investment loss                         (6,632)          (8,381)        (10,028)          (9,594)        (14,265)       (16,495)

Net realized and unrealized gain
 (loss) on investments (Notes 5 & 6):
  Net realized gain (loss)
    on investments                         (13,136)          21,678          15,677          (24,124)         53,901          7,137

  Net change in unrealized
    appreciation (depreciation)
    on investments                        (436,629)        (110,727)         12,357         (626,970)       (214,620)        54,399
                                       -----------      -----------     -----------      -----------     -----------    -----------

Net realized and unrealized
  gain (loss) on investments              (449,765)         (89,049)         28,034         (651,094)       (160,719)        61,536
                                       -----------      -----------     -----------      -----------     -----------    -----------

Net increase (decrease) in net
  assets resulting from operations     $  (456,397)     $   (97,430)    $    18,006      $  (660,688)    $  (174,984)   $    45,041
                                       ===========      ===========     ===========      ===========     ===========    ===========




</TABLE>




                            See accompanying notes.
<PAGE>

                            UNITED STATES GOLD TRUST
                       STATEMENTS OF CHANGES IN NET ASSETS


<TABLE>
<CAPTION>
                                                    Bullion Portfolio                                Coin Portfolio
                                       --------------------------------------------      -----------------------------------------

                                                Year Ended December 31                           Year Ended December 31
                                       --------------------------------------------      -----------------------------------------
                                           1997            1996            1995              1997            1996          1995
                                       -----------     -----------      -----------      ------------    -----------   -----------
<S>                                    <C>              <C>             <C>              <C>              <C>           <C>
From Operations
  Net investment loss                  $    (6,632)    $    (8,381)     $   (10,028)      $    (9,594)   $   (14,265)  $   (16,495)
  Net realized gain (loss) on
    investments                            (13,136)         21,678           15,677           (24,124)        53,901         7,137
  Net change in unrealized
    appreciation (depreciation) on
    investments                           (436,629)       (110,727)          12,357          (626,970)      (214,620)       54,399
                                       -----------     -----------      -----------       -----------    -----------   -----------
 Net increase (decrease) in net
    assets resulting from
    operations                            (456,397)        (97,430)          18,006          (660,688)      (174,984)       45,041

From Unit Transactions
  Issuance of 0; 0; 0; 0;
    0 and 5,178 Units,
    respectively                                 -               -                -                 -              -        79,592
  Redemption of 12,357; 18,649;
    34,578; 26,299; 66,476 and
    55,107 Units, respectively            (157,160)       (282,421)        (521,517)         (344,430)    (1,029,379)     (849,127)
                                       -----------     -----------      -----------       -----------    -----------   -----------
  Net decrease in net
    assets from Unit transactions         (157,160)       (282,421)        (521,517)         (344,430)    (1,029,379)     (769,535)
                                       -----------     -----------      -----------       -----------    -----------   -----------
  Net decrease in net
    assets                                (613,557)       (379,851)        (503,511)       (1,005,118)    (1,204,363)     (724,494)
  Net assets at beginning of year        2,160,978       2,540,829        3,044,340         3,192,490      4,396,853     5,121,347
                                       -----------     -----------      -----------       -----------    -----------   -----------
  Net assets at end of year
    (including accumulated net
     investment loss of $75,436;
     $68,804; $60,423; $108,777;
     $99,183 and $84,918,
     respectively)                     $ 1,547,421     $ 2,160,978      $ 2,540,829       $ 2,187,372    $ 3,192,490   $ 4,396,853
                                       ===========     ===========      ===========       ===========    ===========   ===========

</TABLE>





                            See accompanying notes.

<PAGE>

                            UNITED STATES GOLD TRUST
                        SELECTED PER UNIT DATA AND RATIOS

<TABLE>
<CAPTION>

                                                                   Year Ended December 31 (a)(b)
                       ------------------------------------------------------------------------------------------------------------
                                1997                 1996                  1995                  1994                 1993
                       --------------------  --------------------  --------------------  --------------------- --------------------
                        Bullion     Coin      Bullion     Coin      Bullion     Coin      Bullion     Coin      Bullion     Coin
                       Portfolio  Portfolio  Portfolio  Portfolio  Portfolio  Portfolio  Portfolio  Portfolio  Portfolio  Portfolio
                       ---------  ---------  ---------  ---------  ---------  ---------  ---------  ---------  ---------  ---------

<S>                    <C>        <C>        <C>        <C>        <C>        <C>        <C>        <C>        <C>        <C>
Net asset value at
  beginning of year    $   14.51  $   14.62  $   15.16  $   15.44  $   15.06  $   15.30  $   15.43  $   15.69  $   13.17  $   13.41

Net investment loss         (.05)      (.05)      (.05)      (.05)      (.05)      (.05)      (.05)      (.05)      (.05)      (.05)

Net realized and
  unrealized gain (loss)
  on investments           (3.13)     (3.18)      (.60)      (.77)       .15        .19       (.32)      (.34)      2.31       2.33
                       ---------  ---------  ---------  ---------  ---------  ---------  ---------  ---------  ---------  ---------

Increase (decrease) in
  net asset value          (3.18)     (3.23)      (.65)      (.82)       .10        .14       (.37)      (.39)      2.26       2.28
                       ---------  ---------  ---------  ---------  ---------  ---------  ---------  ---------  ---------  ---------

Net asset value at end
  of year              $   11.33  $   11.39  $   14.51  $   14.62  $   15.16  $   15.44  $   15.06  $   15.30  $   15.43  $   15.69
                       =========  =========  =========  =========  =========  =========  =========  =========  =========  =========


Ratios to average net assets:
Expenses (c)                .35%       .35%       .35%       .35%       .35%       .35%       .35%       .35%       .35%       .35%
Net investment loss (c)    (.35%)     (.35%)     (.35%)     (.35%)     (.35%)     (.35%)     (.35%)     (.35%)     (.35%)     (.35%)

Investment turnover
  rate                      None       None       None       None       None      1.69%     14.24%      9.70%     15.94%      9.83%

Number of Units outstanding
   at end of year        136,589    192,084    148,946    218,383    167,595    284,859    202,173    334,788    209,475    328,344

Net assets at end of year
  (in thousands)       $   1,547  $   2,187  $   2,161  $   3,192  $   2,541  $   4,397  $   3,044  $   5,121  $   3,233  $   5,151

<FN>
Note:

(a)   The selected per unit data was calculated using average net assets during
      the year.
(b)   The Trust's sole investment activity was to hold Gold, and the Trust had
      no income.
(c)   During the years ended December 31, 1997,  1996, 1995, 1994  and 1993, the
      Sponsor reimbursed expenses totaling $6,956,  $6,829,  $6,655,  $6,852 and
      $6,337 for the Bullion Portfolio and $6,796,  $7,694,  $7,554,  $7,870 and
      $7,212 for the Coin  Portfolio,  respectively.  Absent the foregoing,  the
      ratios of expenses to average net assets and the ratios of net  investment
      loss to average net assets would have increased to .72%,  .64%, .58%, .56%
      and .59% for the Bullion Portfolio and .60%, .54%, .51%, .50% and .51% for
      the Coin Portfolio, respectively, for the years then ended.


</FN>
</TABLE>

<PAGE>
                            UNITED STATES GOLD TRUST
                         NOTES TO FINANCIAL STATEMENTS
                                December 31, 1997


1.   Description of the Trust
     United States Gold Trust (the "Trust") is an investment  trust  established
     under the laws of New York in accordance  with an Agreement and Declaration
     of Trust (the "Trust  Agreement"),  dated August 17, 1988,  between Bullion
     Security Corporation (the "Sponsor") and United States Trust Company of New
     York (the "Trustee").  The Trust, which consists of a Bullion Portfolio and
     a Coin Portfolio (the  "Portfolios"),  commenced  investment  operations on
     August 18, 1988. On September 1, 1995, Chase Manhattan Bank, N.A.  acquired
     the securities processing business of the Trustee, including the rights and
     obligations of the Trustee under the Trust Agreement. Other than the change
     of the  Trustee,  no  changes  were  made  to the  Trust  Agreement  or its
     provisions in connection with its acquisition by Chase Manhattan Bank, N.A.

2.   Significant accounting policies
     Value is based on the dealer bid price for wholesale  transactions  at 2:30
     p.m. Eastern Time.

     On August 18,  1988,  25,000  Units of each  Portfolio  were  issued to the
     Sponsor in return for the deposit of gold bullion and  American  Eagle gold
     coins by the Sponsor.  Additional Units of each Portfolio may be issued, up
     to a maximum  aggregate of 1 million Units in each  Portfolio,  in exchange
     for  additional  deposits of gold bullion and American  Eagle gold coins by
     the  Sponsor.  The deposits  must be made so as not to vary the  underlying
     gold per Unit and net  asset  value per Unit of the  respective  Portfolio.
     Cost to investors  includes a sales  charge  computed at a rate of 1.96% of
     the  Offering  Price  (equivalent  to 2% of the  net  amount  invested).  A
     redeeming  Unitholder  may  elect  to be paid  in  cash at the  Portfolio's
     applicable  redemption  price,  based on the dealer bid price for wholesale
     transactions,  or  in  kind.  No  commissions  are  charged  on  redemption
     transactions.  Organizational  and offering  costs in  connection  with the
     formation of the Trust were borne by the Sponsor. On February 20, 1996, the
     Sponsor  decided to  terminate  the public  offering of Units in the Trust.
     Accordingly,  there were no Units of either Portfolio issued to the Sponsor
     in return for deposits of gold bullion and American Eagle gold coins by the
     Sponsor since that date.

3.   Transactions with affiliates
     Under the Trust Agreement, the Trustee is to receive a fee for its ordinary
     services to the Trust,  payable monthly from the assets of the Trust, at an
     annual  rate equal to .10% of each  Portfolio's  average  daily net assets,
     subject to a minimum fee at the rate of $2,500 per year for each Portfolio.
     The  Sponsor is to receive a fee,  payable  monthly  from the assets of the
     Trust,  at an annual rate equal to .20% of each  Portfolio's  average daily
     net  assets.  The Trust  Agreement  provides  that,  with  respect  to each
     Portfolio, the Sponsor will reimburse the Trustee for each calendar year of
     the Trust, up to 50% of the Sponsor's fee for the year, as may be needed to
     reduce the annual  expense ratio of the  Portfolio to .35%.  During each of
     the  three  years in the  period  ended  December  31,  1997,  the  Sponsor
     voluntarily  reimbursed each Portfolio of the Trust  additional  amounts in
     order to maintain  its  expense  ratio at .35%.  The  Sponsor may  continue
     voluntarily  to make such  additional  reimbursements,  although  it is not
     required to do so.




                          Continued on following page.

<PAGE>
                            UNITED STATES GOLD TRUST
                         NOTES TO FINANCIAL STATEMENTS
                                December 31, 1997


     For each of the three years in the period  ended  December  31,  1997,  the
     Trust had no income and made no distributions.  Trustee fees,  Sponsor fees
     and  amounts  waived or  absorbed  by the  Sponsor for the years then ended
     consisted of the following:


<TABLE>
<CAPTION>
                                                   Bullion Portfolio                               Coin Portfolio
                                         -------------------------------------         -------------------------------------
                                            1997          1996          1995              1997          1996          1995
                                         ---------     ---------     ---------         ---------     ---------     ---------
     <S>                                 <C>           <C>           <C>               <C>           <C>           <C>
     Trustee fees                        $   2,500     $   2,500     $   2,718         $   2,682     $   3,932     $   4,469
     Sponsor fees                            3,645         4,620         5,435             5,274         7,864         8,938
     Amounts waived or absorbed
        by the Sponsor                       6,956         6,829         6,655             6,796         7,694         7,554


</TABLE>

     Pursuant to an  agreement  between the Sponsor and World Money  Securities,
     Inc. ("WMS"), an affiliate of the Sponsor,  WMS received from the Sponsor a
     commission  equal to 1.96% of the  Offering  Price of each Unit sold by the
     Trust.  For the years ended December 31, 1997,  1996 and 1995, WMS received
     commissions  of $0,  $1,167 and $2,760,  respectively.  The  agreement  was
     terminated effective February 29, 1996 due to the liquidation of WMS.

4.   Federal income taxes
     The Trust has  received a ruling from the Internal  Revenue  Service to the
     effect that each  Portfolio  will be treated as a grantor trust for Federal
     income tax purposes and not as an association taxable as a corporation.  As
     a grantor trust,  each  Portfolio will not be treated as a taxable  entity;
     instead,  each Unitholder in a Portfolio will be treated as the owner of an
     undivided  interest in that Portfolio  equal to the  Unitholder's  pro rata
     portion of that Portfolio's assets.

5.   Investments
     Purchases, cost of sales of investments and redemptions  in-kind for the
     years ended  December 31, 1997, 1996 and 1995 were as follows:

<TABLE>
<CAPTION>
                                                   Bullion Portfolio                               Coin Portfolio
                                         -------------------------------------         -------------------------------------
                                            1997          1996          1995              1997          1996          1995
                                         ---------     ---------     ---------         ---------     ---------     ---------
     <S>                                 <C>           <C>           <C>               <C>           <C>           <C>
     Purchases                           $       -     $       -     $       -         $       -     $       -     $  78,860
     Sales                                 146,124       292,382       121,494           292,062       468,043        75,880
     Redemptions in-kind                         -             -       403,791            62,370       521,870       777,086


</TABLE>

     For the years ended December 31, 1997, 1996 and 1995, the Bullion Portfolio
     incurred net realized  gains of $0, $0 and $14,041,  respectively,  and the
     Coin  Portfolio  incurred a net  realized  loss of $6,227 and net  realized
     gains of $34,509 and $1,928, respectively, for redemptions in-kind. For the
     years  ended  December  31,  1997,  1996 and 1995,  the  Bullion  Portfolio
     incurred a net realized  loss of $13,136 and net realized  gains of $21,678
     and $1,636,  respectively,  and the Coin Portfolio  incurred a net realized
     loss of $17,897 and net realized gains of $19,392 and $5,209, respectively,
     on the sale of  investments.  The realized gain or loss for Federal  income
     tax purposes is  recognized  only upon the sale of gold bullion or American
     Eagle gold coins, either by the Trust (in which case the gain or loss would
     be allocated to all Unitholders) or by a redeeming Unitholder who elects an
     in-kind  distribution  (in which case any gain or loss would be that of the
     redeeming Unitholder at the time of ultimate sale).



                          Continued on following page.


<PAGE>
                            UNITED STATES GOLD TRUST
                         NOTES TO FINANCIAL STATEMENTS
                                December 31, 1997


     Based on the cost of  investments  of  $1,946,034  and  $2,092,158  for the
     Bullion  Portfolio and $2,819,351 and $3,173,783 for the Coin Portfolio for
     Federal  income tax purposes at December  31, 1997 and 1996,  respectively,
     the aggregate gross and net unrealized  appreciation or  (depreciation)  on
     investments  were  $(401,615)  and $35,014 for the  Bullion  Portfolio  and
     $(578,615) and $48,355 for the Coin Portfolio, respectively.

6.   Composition of net assets
     At December 31, 1997 and 1996, net assets consisted of the following:

<TABLE>
<CAPTION>
                                                      Bullion Portfolio                        Coin Portfolio
                                              -------------------------------         -------------------------------
                                                    1997            1996                    1997            1996
                                              --------------   --------------         --------------    -------------
     <S>                                      <C>              <C>                    <C>               <C>

       Cost of investments                    $    1,946,034   $    2,092,158         $    2,819,351    $   3,173,783
       Net unrealized appreciation
         (depreciation) on investments              (401,615)          35,014               (578,615)          48,355
       Accumulated assets (liabilities)
         in excess of Trust (liabilities)
         assets other than investments                 3,002           33,806                (53,364)         (29,648)
                                              --------------   --------------         --------------    -------------
                                              $    1,547,421   $    2,160,978         $    2,187,372    $   3,192,490
                                              ==============   ==============         ==============    =============
</TABLE>





<PAGE>




           Trustee                                       UNITED STATES
             Chase Manhattan Bank, N.A.                    GOLD TRUST
             770 Broadway
             New York, New York  10003

           Transfer Agent
             Chase Global Funds Services Company
             P.O. Box 2798
             Boston, Massachusetts 02208
             (for overnight delivery services
             73 Tremont Street
             Boston, Massachusetts 02108)
             1-800-341-8900
             In Mass. 1-617-557-8000

           Custodian
             Wilmington Trust Company
             Rodney Square North                            including
             Wilmington, Delaware  19890
                                                      the Bullion Portfolio
           Sponsor
             Bullion Security Corporation                      and
             625 Second Street
             Petaluma, California 94952                the Coin Portfolio

           Independent Auditors
             Ernst & Young LLP
             Sears Tower
             233 South Wacker Drive
             Chicago, Illinois 60606




                  Investor's
              Information Office
             207 Jefferson Square
             Austin, Texas 78763                          ANNUAL REPORT
          1-800-531-5142 Nationwide                     December 31, 1997
       Local or Foreign 1-512-453-7558
          Telecopier 1-512-453-2015