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, 1996 and 1995,  including the schedules of  investments as of
December 31, 1996,  and the related  statements of operations and changes in net
assets for each of the three years in the period ended December 31, 1996 and the
selected  per unit data and  ratios  for each of the  years  since  1992.  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, 1996 and 1995, 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,  1996 and  1995,  the  results  of their
operations  and  changes in their net assets for each of the three  years in the
period  ended  December  31, 1996 and the  selected per unit data and ratios for
each of the years since 1992, in conformity with generally  accepted  accounting
principles.

                                                   ERNST & YOUNG LLP

Chicago, Illinois
March 24, 1997



<PAGE>

                            UNITED STATES GOLD TRUST
                      STATEMENTS OF ASSETS AND LIABILITIES

<TABLE>
<CAPTION>
                                             Bullion Portfolio                Coin Portfolio

                                       ----------------------------      ---------------------------
                                                December 31                     December 31
                                       ----------------------------      ---------------------------
                                           1996            1995             1996           1995
                                       ------------     -----------      -----------     -----------

ASSETS
<S>                                     <C>             <C>              <C>             <C>
Investments, at value
  (based on bid side evaluation)
  (cost:  $2,092,158, $2,384,540,
   $3,173,783 and $4,163,696,
   respectively)
  Gold Bullion                         $  2,127,172     $ 2,530,281     $         -     $         -
  American Eagle Gold Coins                       -               -       3,222,138       4,426,671
Cash                                         42,264          21,408               -               -
                                       ------------     -----------     -----------     -----------
  Total Assets                            2,169,436       2,551,689       3,222,138       4,426,671

LIABILITIES

Bank overdraft                                   -                -          13,292          11,805
Payable to Sponsor                           4,620            5,435           7,864           8,938
Payable to Trustee                           2,500            2,718           3,932           4,469
Other accrued liabilities                    1,338            2,707           4,560           4,606
                                       -----------      -----------     -----------     -----------
  Total Liabilities                          8,458           10,860          29,648          29,818
                                       -----------      -----------     -----------     -----------

NET ASSETS                             $ 2,160,978      $ 2,540,829     $ 3,192,490     $ 4,396,853
                                       ===========      ===========     ===========     ===========
INTEREST OF UNITHOLDERS

Outstanding Units                          148,946          167,595         218,383         284,859
                                       ===========      ===========     ===========     ===========
Redemption Price per Unit
  (based on bid side evaluation)       $     14.51      $     15.16     $     14.62     $     15.44
                                       ===========      ===========     ===========     ===========
Calculation of Offering Price per Unit:
  Aggregate offering side evaluation   $ 2,174,810      $ 2,557,226     $ 3,230,141     $ 4,446,001
                                       ===========      ===========     ===========     ===========

    Divided by outstanding Units       $     14.60      $     15.26     $     14.79     $     15.61

  Plus sales charge of 1.96% of Offering 
    Price (2% of net amount invested)          .29              .30             .30             .31
                                       -----------      -----------     -----------     -----------

Offering Price per Unit                $     14.89      $     15.56     $     15.09     $     15.92
                                       ===========      ===========     ===========     ===========
</TABLE>

                            See accompanying notes.

<PAGE>
<TABLE>
                            UNITED STATES GOLD TRUST
                            SCHEDULE OF INVESTMENTS
                               December 31, 1996
                               Bullion Portfolio
<CAPTION>
                                        Net Weight                       Value
       Refiner                      (Fine troy ounces)      (based on bid side evaluation)
---------------------               ------------------      ------------------------------
<S>                                     <C>                         <C>
ASARCO                                     95.912                    $    35,401
CREDIT SUISSE                              99.500                         36,725
DEGUSSA                                   300.557                        110,936
ENGELHARD                               2,586.518                        954,684
ENGELHARD LONDON                           99.823                         36,845
HANDY & HARTMAN                           592.096                        218,543
JOHNSON & MATTHEY                         898.162                        331,512
MATTHEY BISHOP, USA                       199.562                         73,658
PAMP-SUISSE                               796.000                        293,803
PMR                                        95.002                         35,065
                                        ---------                    -----------
Total (identified cost $2,092,158)      5,763.132                    $ 2,127,172
                                        =========                    ===========

</TABLE>





                            See accompanying notes.


<PAGE>
<TABLE>
                            UNITED STATES GOLD TRUST
                            SCHEDULE OF INVESTMENTS
                               December 31, 1996
                                 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 $3,173,783)              8,557                         $3,222,138
                                           =====                         ==========
</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
                                       --------------------------------------------      ----------------------------------------
                                           1996            1995            1994             1996            1995           1994
                                       ------------     -----------     -----------      -----------     -----------   ----------
<S>                                    <C>              <C>             <C>              <C>             <C>           <C>
Expenses (Note 3):
  Trustee fees                         $      2,500     $     2,718     $     3,115      $     3,932     $     4,469   $    4,927
  Sponsor fees                                4,620           5,435           6,230            7,864           8,938        9,854
  Gold storage fees                           3,090           3,530           4,022            5,163           5,642        6,218
  Professional fees                           4,500           4,500           4,350            4,500           4,500        4,350
  Other                                         500             500             500              500             500          500
                                       ------------     -----------     -----------      -----------     -----------   ----------
  Total expenses                             15,210          16,683          18,217           21,959          24,049       25,849
  Less: amount waived or
    absorbed by Sponsor                       6,829           6,655           6,852            7,694           7,554        7,870
                                       ------------     -----------     -----------      -----------     -----------   ----------

Net investment loss                          (8,381)        (10,028)        (11,365)         (14,265)        (16,495)     (17,979)

Net realized and unrealized gain 
 (loss) on investments (Notes 5 & 6):
  Net realized gain (loss)
    on investments                           21,678          15,677         (22,556)          53,901           7,137      (15,141)

  Net change in unrealized
    appreciation (depreciation)
    on investments                         (110,727)         12,357         (33,917)        (214,620)         54,399      (95,243)
                                       ------------     -----------     -----------      -----------     -----------   ----------

Net realized and unrealized
  gain (loss) on investments                (89,049)         28,034         (56,473)        (160,719)         61,536     (110,384)
                                       ------------     -----------     -----------      -----------     -----------   ----------

Net increase (decrease) in net
  assets resulting from operations     $    (97,430)    $    18,006     $   (67,838)     $  (174,984)    $    45,041   $ (128,363)
                                       ============     ===========     ===========      ===========     ===========   ==========




</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
                                       --------------------------------------------      -----------------------------------------
                                           1996            1995            1994              1996            1995          1994
                                       -----------     -----------      -----------      ------------    -----------   -----------
<S>                                    <C>              <C>             <C>              <C>              <C>           <C>
From Operations
  Net investment loss                  $    (8,381)     $  (10,028)     $  (11,365)      $   (14,265)     $  (16,495)   $  (17,979)
  Net realized gain (loss) on
    investments                             21,678          15,677         (22,556)           53,901           7,137       (15,141)
  Net change in unrealized 
    appreciation (depreciation) on
    investments                           (110,727)         12,357         (33,917)         (214,620)         54,399       (95,243)
                                       -----------     -----------      ----------       -----------     -----------   -----------
 Net increase (decrease) in net
    assets resulting from 
    operations                             (97,430)         18,006         (67,838)         (174,984)         45,041      (128,363)

From Unit Transactions
  Issuance of 0; 0; 29,982; 0;
    5,178 and 35,500 Units,
    respectively                                 -               -         456,175                 -          79,592       547,249
  Redemption of 18,649; 34,578;
    37,284; 66,476; 55,107 and
    29,056 Units, respectively            (282,421)       (521,517)       (577,059)       (1,029,379)       (849,127)     (448,121)
                                       -----------     -----------      ----------       -----------     -----------   ----------- 
  Net increase (decrease) in net
    assets from Unit transactions         (282,421)       (521,517)       (120,884)       (1,029,379)       (769,535)       99,128
                                       -----------     -----------      ----------       -----------     -----------   -----------
  Net decrease in net
    assets                                (379,851)       (503,511)       (188,722)       (1,204,363)       (724,494)      (29,235)
  Net assets at beginning of year        2,540,829       3,044,340       3,233,062         4,396,853       5,121,347     5,150,582
                                       -----------     -----------      ----------       -----------     -----------   -----------
  Net assets at end of year
    (including accumulated net
     investment loss of $68,804;
     $60,423; $50,395; $99,183;
     $84,918 and $68,423,
     respectively)                     $ 2,160,978     $ 2,540,829      $ 3,044,340      $ 3,192,490     $ 4,396,853   $ 5,121,347
                                       ===========     ===========      ===========      ===========     ===========   ===========

</TABLE>





                            See accompanying notes.

<PAGE>

                            UNITED STATES GOLD TRUST
                        SELECTED PER UNIT DATA AND RATIOS

<TABLE>
<CAPTION>

                                                                   Year Ended December 31 (a)(b)
                       ------------------------------------------------------------------------------------------------------------
                                1996                 1995                  1994                  1993                 1992
                       --------------------  --------------------  --------------------  ---------------------  -------------------
                        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    $   15.16  $   15.44  $   15.06  $   15.30  $   15.43  $   15.69  $   13.17  $   13.41   $   14.07  $  14.32

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

Net realized and 
  unrealized gain (loss) 
  on investments            (.60)      (.77)       .15        .19       (.32)      (.34)      2.31       2.33        (.85)     (.86)
                       ---------  ---------  ---------  ---------  ---------  ---------  ---------  ---------   ---------  --------

Increase (decrease) in
  net asset value           (.65)      (.82)       .10        .14       (.37)      (.39)      2.26       2.28        (.90)     (.91)
                       ---------  ---------  ---------  ---------  ---------  ---------  ---------  ---------   ---------  --------

Net asset value at end 
  of year              $   14.51  $   14.62  $   15.16  $   15.44  $   15.06  $   15.30  $   15.43  $   15.69   $   13.17  $  13.41
                       =========  =========  =========  =========  =========  =========  =========  =========   =========  ========


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      1.69%     14.24%      9.70%     15.94%      9.83%        None     6.68%

Number of Units outstanding
   at end of year        148,946    218,383    167,595    284,859    202,173    334,788    209,475    328,344     181,907   294,082

Net assets at end of year
  (in thousands)       $   2,161  $   3,192  $   2,541  $   4,397  $   3,044  $   5,121  $   3,233  $   5,151   $   2,396  $  3,942
 
<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, 1996, 1995, 1994, 1993   and 1992, the
      Sponsor reimbursed expenses totaling $6,829,  $6,655,  $6,852,  $6,337 and
      $6,216 for the Bullion Portfolio and $7,694,  $7,554,  $7,870,  $7,212 and
      $6,670 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 .64%,  .58%, .56%, .59%
      and .62% for the Bullion Portfolio and .54%, .51%, .50%, .51% and .52% for
      the Coin Portfolio, respectively, for the years then ended.


</FN>
</TABLE>

<PAGE>
                            UNITED STATES GOLD TRUST
                         NOTES TO FINANCIAL STATEMENTS
                                December 31, 1996


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 during the year ended December 31, 1996.

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 1996, 1995
     and 1994, 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, 1996


     For the years ended  December  31,  1996,  1995 and 1994,  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
                                         -------------------------------------         -------------------------------------
                                            1996          1995          1994              1996          1995          1994
                                         ---------     ---------     ---------         ---------     ---------     ---------
     <S>                                  <C>           <C>           <C>               <C>           <C>           <C>
     Trustee fees                         $ 2,500       $ 2,718       $ 3,115           $ 3,932       $ 4,469       $ 4,927
     Sponsor fees                           4,620         5,435         6,230             7,864         8,938         9,854
     Amounts waived or absorbed 
        by the Sponsor                      6,829         6,655         6,852             7,694         7,554         7,870


</TABLE>

     Pursuant to an  agreement  between the Sponsor and World Money  Securities,
     Inc. ("WMS"), an affiliate of the Sponsor,  WMS receives 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, 1996,  1995 and 1994, WMS received
     commissions of $1,167, $2,760 and $17,630, 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 and cost of sales of investments and redemptions  in-kind for the
     years ended  December 31 were as follows:  

<TABLE>
<CAPTION>
                                                   Bullion Portfolio                               Coin Portfolio
                                         -------------------------------------         -------------------------------------
                                            1996          1995          1994              1996          1995          1994
                                         ---------     ---------     ---------         ---------     ---------     ---------
     <S>                                  <C>           <C>           <C>               <C>          <C>           <C>
     Purchases                            $      -      $      -      $458,922          $      -     $ 78,860      $551,060
     Sales                                 292,382       121,494       398,769           468,043       75,880        76,934
     Redemptions in-kind                         -       403,791       239,025           521,870      777,086       420,310


</TABLE>

     For the years ended December 31, 1996, 1995 and 1994, the Bullion Portfolio
     incurred  net realized  gains of $0 and $14,041 and a net realized  loss of
     $9,492, respectively, and the Coin Portfolio incurred net realized gains of
     $34,509 and $1,928 and a net realized  loss of $16,967,  respectively,  for
     redemptions  in-kind. For the years ended December 31, 1996, 1995 and 1994,
     the Bullion Portfolio incurred net realized gains of $21,678 and $1,636 and
     a net  realized  loss of  $13,064,  respectively,  and the  Coin  Portfolio
     incurred net realized gains of $19,392, $5,209 and $1,826, 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, 1996


     Based on the cost of  investments  of  $2,092,158  and  $2,384,540  for the
     Bullion  Portfolio and $3,173,783 and $4,163,696 for the Coin Portfolio for
     Federal  income tax purposes at December  31, 1996 and 1995,  respectively,
     the aggregate  gross and net unrealized  appreciation  of investments  were
     $35,014 and $145,741 for the Bullion Portfolio and $48,355 and $262,975 for
     the Coin Portfolio, respectively.

6.   Composition of net assets
     At December 31 net assets consisted of the following:

<TABLE>
<CAPTION>
                                                      Bullion Portfolio                        Coin Portfolio
                                              -------------------------------         -------------------------------
                                                    1996            1995                    1996            1995     
                                              --------------   --------------         --------------    -------------
     <S>                                      <C>              <C>                    <C>               <C>     
     ASSETS                                     
       Cost of investments                    $    2,092,158   $    2,384,540         $    3,173,783    $   4,163,696 
       Net unrealized appreciation
         of investments                               35,014          145,741                 48,355          262,975
       Accumulated assets (liabilities) 
         in excess of Trust (liabilities) 
         assets other than investments                33,806           10,548                (29,648)         (29,818)
                                              --------------   --------------         --------------    -------------
                                              $    2,160,978   $    2,540,829         $    3,192,490    $   4,396,853
                                              ==============   ==============         ==============    =============
</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, 1996
       Local or Foreign 1-512-453-7558
          Telecopier 1-512-453-2015