[PHOTO OMITTED]
Gabelli
Gold
Fund,
Inc.
SEMI-ANNUAL REPORT
JUNE 30, 1999
<PAGE>
[GRAPHIC OMITTED]
Gabelli Gold Fund, Inc.
Semi-Annual Report - June 30, 1999
[PHOTO OMITTED]
Caesar Bryan
To Our Shareholders,
On two occasions during the past six months, just when gold and gold
equity shares began to perform well, the rallies were derailed by news of
official sector sales. In the first quarter of 1999, it was news that the
International Monetary Fund ("IMF") wanted to sell a portion of its gold
holdings to help relieve the debt burden of some lesser-developed countries.
However, much more dramatic was the announcement by the Bank of England on May 7
that the United Kingdom intended to sell more than half of its gold reserves.
This reversed the rally and helped push the price of gold to a twenty-year low
by the end of June.
Investment Performance
For the second quarter ended June 30, 1999, The Gabelli Gold Fund's (the
"Fund") net asset value declined 1.1%. The Lipper Gold Fund Average and
Philadelphia Gold & Silver ("XAU") Index of large North American gold companies
had total returns of 2.1% and 12.4%, respectively, over the same period. The XAU
index is an unmanaged indicator of stock market and investment performance,
while the Lipper average reflects the average performance of mutual funds
classified in this particular category. The Fund declined 5.1% over the trailing
twelve-month period. The Lipper Gold Fund Average and XAU Index declined 5.2%
and 5.8%, respectively, over the same twelve-month period.
For the three-year period ended June 30, 1999, the Fund's total return averaged
(25.9)% annually versus average annual total returns of (22.2)% and (17.8)% for
the Lipper Gold Fund Average and XAU Index, respectively. Since inception on
July 11, 1994 through June 30, 1999, the Fund had a cumulative decline of 45.6%,
which equates to an average annual return of (11.5)%.
<PAGE>
INVESTMENT RESULTS (a)
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------
Quarter
-------------------------------------------
1st 2nd 3rd 4th Year
<S> <C> <C> <C> <C> <C> <C>
1999: Net Asset Value...................... $5.45 $5.39 -- -- --
Total Return......................... (3.7)% (1.1)% -- -- --
- ----------------------------------------------------------------------------------------------------------
1998: Net Asset Value...................... $6.63 $5.68 $6.17 $5.66 $5.66
Total Return......................... 12.9% (14.3)% 8.6% (8.3)% (3.6)%
- ----------------------------------------------------------------------------------------------------------
1997: Net Asset Value...................... $11.83 $9.79 $9.17 $5.87 $5.87
Total Return......................... (4.0)% (17.2)% (6.3)% (35.4)% (51.9)%
- ----------------------------------------------------------------------------------------------------------
1996: Net Asset Value...................... $14.00 $13.40 $13.46 $12.32 $12.32
Total Return......................... 22.7% (4.3)% 0.4% (8.5)% 8.0%
- ----------------------------------------------------------------------------------------------------------
1995: Net Asset Value...................... $11.00 $11.96 $12.27 $11.41 $11.41
Total Return......................... (0.6)% 8.7% 2.6% (7.0)% 3.1%
- ----------------------------------------------------------------------------------------------------------
1994: Net Asset Value...................... -- -- $12.37 $11.07 $11.07
Total Return......................... -- -- 23.7%(b) (10.5)% 10.7%(b)
- ----------------------------------------------------------------------------------------------------------
</TABLE>
- --------------------------------------------------------------------------------
Average Annual Returns - June 30, 1999 (a)
1 Year.................................... (5.1)%
3 Year.................................... (25.9)%
Life of Fund (b).......................... (11.5)%
- --------------------------------------------------------------------------------
Dividend History
- --------------------------------------------------------------------------------
Payment (ex) Date Rate Per Share Reinvestment Price
- ----------------- -------------- ------------------
December 29, 1997 $0.058 $5.86
(a) Total returns and average annual returns reflect changes in share price and
reinvestment of dividends and are net of expenses. The net asset value of the
Fund is reduced on the ex-dividend (payment) date by the amount of the dividend
paid. Of course, returns represent past performance and do not guarantee future
results. Investment returns and the principal value of an investment will
fluctuate. When shares are redeemed they may be worth more or less than their
original cost. (b) From commencement of investment operations on July 11, 1994.
Note: Investing in foreign securities involves risks not ordinarily associated
with investments in domestic issues, including currency fluctuation, economic
and political risks. Investing in gold is considered speculative and is affected
by a variety of worldwide economic, financial and political factors.
Our Investment Objective
The Fund's objective is to obtain long term capital appreciation by
investing in equity securities of foreign and domestic issuers principally
engaged in gold and gold-related activities.
Our Approach
We look at a number of company specifics in order to determine which gold
stocks are relatively undervalued. Our primary focus is on capitalization per
ounce of production and, more importantly, on capitalization per ounce of
recoverable reserves. This determines how much gold actually backs every dollar
invested in a gold company. We appreciate that every mining company must replace
the gold that it
2
<PAGE>
mines, and we place a heavy emphasis on the quality of management and their
ability to create shareholder wealth. We invest globally with an emphasis on
gold-producing companies.
Global Allocation
The accompanying chart presents the Fund's holdings by geographic region
as of June 30, 1999. The geographic allocation will change based on current
global market conditions. Countries and/or regions represented in the chart and
below may or may not be included in the Fund's future portfolio.
HOLDINGS BY GEOGRAPHIC REGION - 6/30/99
[GRAPHIC OMITTED]
[The following table was depicted as a pie chart in the printed material.]
North America 62.8%
South Africa 29.0%
Australia 5.2%
Europe 1.7%
Latin America 1.3%
COMMENTARY
During the second quarter, there was a marked differentiation in the
performance of the larger, more liquid gold equities and the rest of the
companies in the sector. The larger constituents of the XAU index, namely
Newmont Mining, Barrick Gold and Placer Dome, which together make up 56% of the
index, rose by 12.8%, 13.6%, and 4.4% respectively. However, with few
exceptions, North American mid-cap and foreign gold equities suffered huge
losses during the quarter as investors liquidated holdings. Low cost producers
with solid growth potential such as GoldCorp, Meridian Gold and IAM Gold, all of
which are significant Fund holdings, declined by between 18% and 24%. We do not
believe this divergence in performance is warranted by fundamentals but rather
reflects the fear that currently grips the market and a premium that investors
are willing to attach to companies with trading liquidity. Aside from the large
capitalization stocks, winners during the quarter included the Fund's platinum
holdings such as Impala, Stillwater Mining and Northam which rose by 44%, 23%
and 14%, respectively. Two portfolio holdings were acquisition targets during
the quarter: West Rand Consolidated Mines and its subsidiary Kalahari both
agreed to be taken over by Harmony.
The decision by the British Treasury to publicly auction a portion of its
gold reserves has aroused considerable criticism from many corners. Indeed, on
June 16, a week after the decision was announced, a debate took place in the
House of Commons concerning the proposed sale. Peter Tapsell, a Member of
Parliament in opposition to the sale, gave eight reasons why the sale goes
against Britain's national interest. We paraphrase his comments below:
First, a move such as the one announced on May 7 was always likely to
destabilize the gold price, as Britain is a leading Group of Seven country whose
example is likely to influence other countries and it was not expected to sell
gold. Market sentiment has become overwhelmingly negative and the price has
3
<PAGE>
collapsed. Second, the decision reduces our monetary independence and monetary
sovereignty. We are told that the decision is not connected with preparations
for joining the euro, but if we were to join--the Treasury has said that 40% of
the proceeds from those gold sales will be invested in the euro--and if the euro
were then to collapse or we were obliged to leave in the future, the absence of
significant gold reserves would make it much more difficult to establish the
credibility of any new currency that we would set up. Third, the decision smacks
of short term thinking. In their foreign reserve policy, governments and central
banks are supposed to act in the long term interests of their country. It is
true that on a short term view, gold has not performed well purely as an
investment in the past 20 years, but that reflects mainly the success, which is
possibly temporary, of central banks in controlling inflation. No government can
be sure that price stability will endure forever. Fourth, the decision is a
threat to the London gold market because it reduces the Bank's ability to act as
what is known as a swing lender to the market. Fifth, about 20% of the proceeds
are to be invested in yen--so the Treasury tells us. Yet, by lending gold we
could earn a better return, as the rate of interest on gold is higher than that
on yen investments. I have already mentioned that 40% is to be invested in
euros, yet we hear that the Netherlands is already taking steps to build up its
foreign reserves to protect the guilder if the euro were to collapse. Sixth, the
concept of reserve management that lies behind the decision is deeply flawed.
The Treasury has argued that gold makes up almost half of the non-hedged or "net
reserves", to quote its press release. That concept of net reserves is
arbitrary, as it all depends on what liabilities are deducted from gross assets.
After the intended sale of 415 million tonnes of our gold--125 million tonnes
straight away and 290 million tonnes in the medium term--our gold reserves will
be only 7% of our gross reserves, which is slightly less than those of Albania.
Seventh, the history of the past fifty years shows again and again that United
Kingdom governments have from time to time been forced to intervene, either to
stop the pound from rising too quickly or, more frequently, to try to slow a
fall in the pound. It makes no sense to throw away a key element of that
instrument. No other major country is doing so. In relation to imports, our
reserves are already far smaller than those of comparable countries. Eighth, in
the view of many leading bullion dealers, the method of sale
chosen--auctions--is also ill advised. Whatever the merits of transparency, the
U.K. taxpayer has certainly lost substantially from the drop in the price
consequent on the announcement and the resulting fall in the expected proceeds
from gold sales. Each bi-monthly auction of our gold--the first of which will be
held as soon as July 6--is likely to worsen that problem.
Mr. Tapsell's last point was prescient. The first auction took place on
July 6 and 25 tonnes (803,600 ounces) were sold at $261.20 per ounce compared to
a price of $290 per ounce just before the announcement. A total of 4.2 million
ounces was bid for which meant the auction was covered 5.2 times. Following the
auction, short sellers entered the market and drove the price to a new low.
Of course, waiting in the wings is the IMF, which also wants to sell part
of its holdings. Ironically, this sale is being undertaken to help pay for debt
relief of highly indebted poorer countries. Many of
4
<PAGE>
these countries, located in Africa, are gold producers. South Africa, with high
unemployment, has opposed IMF sales vigorously and opposition to the proposal is
growing in the U.S. Congress.
We would not be surprised to see the IMF proposal defeated in Congress or
even prior to such an event, the IMF changing its position. Additionally, it is
possible that the British government will review its policy. These moves would
help restore stability to the gold market.
The British announcement has created immensely negative sentiment towards
gold and has provided short sellers with an opportunity to add to positions as
evidenced by higher lease rates. However, with the recovery falling hard in the
Far East, the basic demand supply equation remains highly supportive to higher
prices but we cannot predict when fundamentals will assert themselves.
Let's Talk Stocks
The following are stock specifics on selected holdings of our Fund.
Favorable earnings prospects do not necessarily translate into higher stock
prices, but they do express a positive trend which we believe will develop over
time. The share prices of foreign holdings are stated in U.S. dollar equivalent
terms as of June 30, 1999.
Anglogold Ltd. (ANGJ.J - $43.09 - Johannesburg Stock Exchange) comprises the
South African gold assets of the Anglo American Group. The company's
reorganization involved an offering of shares in Vaal Reefs to shareholders in
the other mines and then a name change from Vaal Reefs to Anglogold. The company
is solely focused on gold and in the future, management efforts will not be
diluted by other mining activities. Over time, we expect the company will expand
outside South Africa, possibly by acquiring Minorco's gold assets. In the
meantime, further improvements can be expected from the company's extensive
South African assets.
Barrick Gold Corp. (ABX - $19.375 - NYSE) is one of the world's leading gold
mining companies. Much of Barrick's growth has come from their very high quality
mines near Elko in Nevada, which the company purchased in the early 1980s.
Barrick has used cash flows from its Nevada Mines and the profits from the
industry's most successful hedging programs to acquire other gold assets in both
North America and overseas. Barrick has low operating costs, a strong balance
sheet and entrepreneurial management.
Euro-Nevada Mining Corp. (EN.TO - $11.89 - Toronto Stock Exchange) is a sister
company of Franco-Nevada and shares the same management. However, Euro-Nevada
only invests in gold royalty properties. The company's flagship royalty
properties are its 4% net smelter return and 5% net profits interest royalty on
Barrick Gold's Meikle Mine in the Carlin Trend of Nevada. The company has
assembled impressive royalty properties, many of which are in production. Among
a number of recent exciting developments is the continuing flow of news from the
company's Midas joint venture in Nevada
5
<PAGE>
with Franco-Nevada. Euro-Nevada owns 50% of this project, which will be one of
the lowest cost gold mines in the world when it comes into production.
GoldCorp Inc. (GA.TO - $4.90 - Toronto Stock Exchange) is a mid-sized Canadian
gold producer with two producing gold mines and two industrial mineral
operations. The company's most significant asset is the Red Lake Mine, which is
part of a major gold camp in Canada. Exploration drilling has revealed
previously unknown high-grade ore zones, which will add significantly to the
mine's reserves. These new discoveries will result in increased production at
significantly lower costs. GoldCorp is undervalued relative to other mid-sized
producers and we expect management to add significantly to shareholder value.
Gold Fields Ltd. (GFLJ.J - $3.43 - Johannesburg Stock Exchange) is South
Africa's second largest gold producer and was created by the amalgamation of a
number of South African mines. The company controls the vast gold mines of Kloof
and Driefontein as well as smaller mines in South Africa. Outside South Africa,
Gold Fields is bringing a mine to production in Ghana and is continually seeking
other opportunities.
Harmony Gold Mining Ltd. (HARJ.J - $4.71 - Johannesburg Stock Exchange) is a
medium size gold company producing nearly one million ounces of gold per year.
The company has developed a core competency in mining low grade ore from
underground very efficiently. Harmony Gold Mining has taken these skills and
applied the techniques to other poorly managed mines with success. Any small
increase in the gold price will likely have a very positive impact on profits.
Homestake Mining Co. (HM - $8.1875 - NYSE) is the fourth largest North American
gold mining company with operations in all of the major gold regions except
South Africa. The company has been aggressive in replacing production due to the
depletion of older mines in the United States. Homestake has recently made
acquisitions in Australia, Canada and South America. The company does not hedge
its gold production and is a higher cost producer. This makes Homestake highly
operationally leveraged to changes in the gold price.
Meridian Gold Inc. (MDG - $4.625 - NYSE) is a small Nevada-based gold mining
company that expects to produce 250,000 ounces of gold in 1999. The company is
currently building a mine in Chile that is on budget for startup later in 1999.
Meridian has an active exploration program focused near their Chilean mine and
in Nevada on the Carlin Trend.
Newmont Mining Corp. (NEM - $19.875 - NYSE) is one of the premier growing gold
mining companies in North America. Following a merger with Santa Fe Gold in May
1997, the company significantly added to its gold reserves. Newmont expects to
produce about four million ounces in 1999 at a cash cost of less than $200 per
ounce. Seventy five percent of the company's production comes from Nevada, where
Newmont has a very large land position. Outside the United States, the company
has operations in
6
<PAGE>
Indonesia, Peru and Uzbekistan. The company is currently developing a large
copper and gold porphyry in Indonesia. Although Newmont is a low cost producer,
the stock is very sensitive to changes in the gold price because the company
does not hedge its production and has a significant amount of debt.
Placer Dome Inc. (PDG - $11.8125 - NYSE) is one of the leading gold mining
companies in North America. In 1999, the company expects to produce 2.9 million
ounces of gold and over 10 million ounces of silver. Placer Dome also has copper
interests. The company operates mines in North America, Australia, Papua New
Guinea and Chile. Placer Dome's most profitable mine is the Pipeline in the
United States that produces gold at a cash cost of less than $100 per ounce.
Placer's main development property is located in Venezuela, which is a large
project expected to cost over $500 million to bring into production.
Stillwater Mining Co. (SWC - $32.6875 - AMEX) is the only U.S. producer of
platinum and palladium, rare precious metals used in many industrial
applications and in the jewelry industry. The largest use for platinum is in
catalytic converters for the auto industry, while about half of the supply of
palladium is consumed in the production of electronic components for personal
computers and cellular telephones. Historically, platinum has traded at a
premium to the gold price. Russia is the world's major producer of palladium.
However, due to uncertainties about supplies, combined with strong demand, the
price of palladium has risen sharply during the past year. Stillwater controls a
massive high-grade platinum/palladium ore body in southern Montana. New
management has been successful in improving mining operations and is now
embarking on an expansion program. The company has excellent growth potential.
Minimum Initial Investment - $1,000
The Fund's minimum initial investment for both regular and retirement
accounts is $1,000. There are no subsequent investment minimums. No initial
minimum is required for those establishing an Automatic Investment Plan.
Additionally, The Gabelli Gold Fund and other Gabelli Funds are available
through the no-transaction fee programs at many major discount brokerage firms.
Internet
You can now visit us on the Internet. Our home page at
http://www.gabelli.com contains information about Gabelli Asset Management Inc.,
the Gabelli Mutual Funds, IRAs, 401(k)s, quarterly reports, closing prices and
other current news. You can send us e-mail at [email protected].
7
<PAGE>
In Conclusion
The Fund remains concentrated in leading gold companies and mid-sized gold
producers with excellent growth potential. These companies are highly
operationally leveraged and should perform well in a higher gold price
environment.
The Fund's daily net asset value is available in the financial press and
each evening after 6:00 PM (Eastern Time) by calling 1-800-GABELLI
(1-800-422-3554). The Fund's Nasdaq symbol is GOLDX. Please call us during the
business day for further information.
Sincerely,
/s/ Caesar Bryan
Caesar Bryan
President and Portfolio Manager
July 15, 1999
- --------------------------------------------------------------------------------
Top Ten Holdings
June 30, 1999
-------------
Placer Dome Inc. Anglogold Ltd.
Barrick Gold Corp. Stillwater Mining Co.
Newmont Mining Corp. Impala Platinum Holdings Ltd.
Harmony Gold Mining Ltd. Homestake Mining Co.
Gold Fields Ltd. GoldCorp Inc.
- --------------------------------------------------------------------------------
NOTE: The views expressed in this report reflect those of the portfolio manager
only through the end of the period stated in this report. The manager's views
are subject to change at any time based on market and other conditions.
8
<PAGE>
Gabelli Gold Fund, Inc.
Portfolio of Investments -- June 30, 1999 (Unaudited)
================================================================================
Market
Shares Cost Value
------ ---- -----
COMMON STOCKS -- 94.3%
Metals and Mining -- 94.3%
Australia -- 5.4%
220,000 Lihir Gold Ltd.+ ...................... $ 316,088 $ 166,010
300,000 Normandy Mining Ltd. .................. 350,817 199,768
80,000 Ranger Minerals NL+ ................... 235,400 124,441
300,000 Resolute Samantha Ltd. ................ 290,386 150,918
140,000 Ross Mining NL ........................ 93,129 59,308
----------- -----------
1,285,820 700,445
----------- -----------
Ireland -- 0.7%
214,771 Glencar Explorations plc+ ............. 140,524 94,792
----------- -----------
North America -- 55.6%
35,000 Agnico-Eagle Mines Ltd. ............... 212,035 244,711
5,000 Apex Silver Mines Ltd.+ ............... 59,000 61,875
45,000 Barrick Gold Corp. .................... 946,563 871,875
32,600 Bema Gold Corp.+ ...................... 66,803 18,338
35,700 Euro-Nevada Mining Corp. .............. 396,922 424,527
26,700 Franco-Nevada Mining Corp. ............ 461,553 413,115
122,900 GoldCorp Inc., Cl. A+ ................. 546,513 602,024
35,000 Golden Star Resources Ltd.+ ........... 273,762 25,421
94,200 Guyanor Resources SA, Cl. B+ .......... 142,317 30,550
78,640 Homestake Mining Co. .................. 805,562 643,865
144,700 IAM Gold+ ............................. 532,386 293,301
150,000 Kinross Gold Corp.+ ................... 430,495 251,728
10,000 Meridian Gold Inc.+ ................... 43,000 46,250
70,000 Meridian Gold Inc., Instl.+ ........... 253,534 323,976
168,800 Moydow Mines
International Inc. + (a) ............ 103,662 159,671
41,700 Newmont Mining Corp. .................. 909,085 828,788
93,120 Placer Dome Inc. ...................... 1,034,775 1,099,980
20,025 Stillwater Mining Co.+ ................ 243,540 654,567
276,000 TVX Gold Inc.+ ........................ 991,921 263,752
22,437 Venoro Gold Corp., Cl. A+ ............. 88,428 2,274
----------- -----------
8,541,856 7,260,588
----------- -----------
Peru -- 1.4%
23,801 Cia De Minas
Buenaventura SA, Cl. B .............. 85,310 181,965
----------- -----------
South Africa -- 30.1%
8,529 Anglogold Ltd. (a) .................... 575,717 367,488
13,400 Anglogold Ltd., ADR ................... 321,014 288,100
21,658 Ashanti Goldfields Ltd. (a) ........... 1,897 2,166
60,000 Ashanti Goldfields Ltd., ADR .......... 461,067 416,250
205,000 Avgold Ltd.+ (a) ...................... 175,409 111,769
100,700 Durban Roodepoort Deep
Ltd. + (a) .......................... 255,017 173,554
75,000 Durban Roodepoort Deep
Ltd., ADR+ .......................... 169,688 131,250
46,000 Gold Fields Ltd. (a) .................. 319,463 158,125
147,249 Gold Fields Ltd., ADR ................. 657,486 505,120
70,000 Harmony Gold Mining Ltd. (a) .......... 297,728 329,449
78,000 Harmony Gold Mining Ltd., ADR ......... 482,726 377,813
26,000 Impala Platinum Holdings Ltd., ADR .... 308,425 649,999
128,355 Kalahari Goldridge Mining Co. Ltd.+ ... 72,594 44,669
367,750 Northam Platinum Ltd.+ ................ 452,320 294,964
52,200 West Rand Consolidated
Mines Ltd.+ ......................... 142,175 84,343
----------- -----------
4,692,726 3,935,059
----------- -----------
United Kingdom -- 1.1%
34,273 Randgold Resources Ltd., ADR+ ......... 316,886 137,092
----------- -----------
TOTAL COMMON STOCKS 15,063,122 12,309,941
----------- -----------
OPTIONS -- 0.1%
South Africa -- 0.1%
47,000 Durban Roodepoort Deep Ltd.+ .......... 143,391 10,515
23,630 Durban Roodepoort Deep Ltd.,
Ser. B+ ............................. 54,682 9,007
----------- -----------
198,073 19,522
----------- -----------
Principal
Amount
------
U.S. GOVERNMENT OBLIGATIONS -- 9.9%
$1,300,000 U.S. Treasury Bills,
4.49% to 4.64% ++,
due 08/05/99 to 09/23/99 ............ 1,291,525 1,291,651
----------- -----------
TOTAL
INVESTMENTS -- 104.3% ............... $16,552,720 13,621,114
===========
Other Assets and
Liabilities (Net) -- (4.3)% ......... (566,764)
-----------
NET ASSETS -- 100.0%
(2,423,825 shares outstanding) ...... $13,054,350
===========
NET ASSET VALUE,
Offering and Redemption
Price Per Share ..................... $5.39
=====
For Federal tax purposes:
Aggregate cost ........................ $16,552,720
===========
Gross unrealized appreciation ......... $ 1,196,241
Gross unrealized depreciation ......... (4,127,847)
-----------
Net unrealized depreciation ........... $(2,931,606)
===========
Net
Settlement Unrealized
Date Depreciation
---- ------------
FORWARD FOREIGN EXCHANGE CONTRACTS
289,324(b) Deliver Canadian Dollars in
exchange for
USD 195,483 ......................... 07/06/99 $(2,386)
- ---------------
(a) Security fair valued as determined by the Board of Directors.
(b) Principal amount denoted in Canadian Dollars.
+ Non-income producing security.
++ Represents annualized yield at date of purchase.
ADR - American Depositary Receipt.
USD - U.S. Dollars.
% of
Market Market
Geographic Diversification Value Value
- -------------------------- ----- -----
North America 62.8% $ 8,552,239
South Africa 29.0% 3,954,581
Australia 5.2% 700,445
Europe 1.7% 231,884
Latin America 1.3% 181,965
------ -----------
100.0% $13,621,114
====== ===========
See accompanying notes to financial statements.
9
<PAGE>
Gabelli Gold Fund, Inc.
Statement of Assets and Liabilities
June 30, 1999 (Unaudited)
================================================================================
Assets:
Investments, at value (Cost $16,552,720) ................ $ 13,621,114
Receivable for investments sold ......................... 345,388
Deferred organizational expenses ........................ 1,348
------------
Total Assets ............................................ 13,967,850
------------
Liabilities:
Payable for investments purchased ....................... 807,911
Payable for Fund shares redeemed ........................ 4,500
Payable for investment advisory fees .................... 10,377
Payable for distribution fees ........................... 2,599
Payable to custodian .................................... 10,043
Unrealized depreciation on forward
foreign exchange contracts .......................... 2,386
Other accrued expenses .................................. 75,684
------------
Total Liabilities ....................................... 913,500
------------
Net Assets applicable to 2,423,825
shares outstanding .................................. $ 13,054,350
============
Net Assets consist of:
Capital stock, at par value ............................. $ 2,424
Additional paid-in capital .............................. 21,676,423
Accumulated net investment loss ......................... (335,988)
Accumulated net realized loss on investments
and foreign currency transactions ................... (5,354,517)
Net unrealized depreciation on investments
and foreign currency transactions ................... (2,933,992)
------------
Total Net Assets ........................................ $ 13,054,350
============
Net Asset Value, offering and redemption
price per share ($13,054,350/2,423,825
shares outstanding; 1,000,000,000 shares
authorized of $0.001 par value) ..................... $5.39
=====
Statement of Operations
For the Six Months Ended June 30, 1999 (Unaudited)
================================================================================
Investment Income:
Dividends (net of foreign taxes of $471) ................. $ 76,612
Interest ................................................. 9,394
---------
Total Investment Income .................................. 86,006
---------
Expenses:
Investment advisory fees ................................. 57,994
Distribution fees ........................................ 14,499
Legal and audit fees ..................................... 20,027
Shareholder report expenses .............................. 19,616
Shareholder services fees ................................ 18,376
Registration fees ........................................ 14,750
Custodian fees ........................................... 9,298
Organizational expenses .................................. 8,775
Directors' fees .......................................... 7,920
Interest expense ......................................... 765
Miscellaneous expenses ................................... 2,958
---------
Total Expenses ........................................... 174,978
---------
Net Investment Loss ...................................... (88,972)
---------
Net Realized and Unrealized Loss
on Investments:
Net realized loss on investments and
foreign currency transactions ........................ (150,366)
Net change in unrealized depreciation
on investments and foreign currency
transactions ......................................... (685,817)
---------
Net realized and unrealized loss
on investments and foreign
currency transactions ................................ (836,183)
---------
Net decrease in net assets resulting
from operations ...................................... $(925,155)
=========
Statement of Changes in Net Assets
================================================================================
<TABLE>
<CAPTION>
Six Months Ended Year Ended
June 30, 1999 December 31,
(Unaudited) 1998
------------ ------------
<S> <C> <C>
Operations:
Net investment loss .................................................. $ (88,972) $ (221,481)
Net realized loss on investments and foreign currency transactions ... (150,366) (3,093,749)
Net change in unrealized depreciation on investments
and foreign currency transactions .................................. (685,817) 1,873,747
------------ ------------
Net decrease in net assets resulting from operations ................. (925,155) (1,441,483)
------------ ------------
Capital share transactions:
Net increase in net assets from capital share transactions ........... 2,703,695 4,620,443
------------ ------------
Net increase in net assets ........................................... 1,778,540 3,178,960
Net Assets:
Beginning of period .................................................. 11,275,810 8,096,850
------------ ------------
End of period ........................................................ $ 13,054,350 $ 11,275,810
============ ============
</TABLE>
See accompanying notes to financial statements.
10
<PAGE>
Gabelli Gold Fund, Inc.
Notes to Financial Statements (Unaudited)
================================================================================
1. Organization. The Gabelli Gold Fund, Inc. (the "Fund") was organized on May
13, 1994 as a Maryland corporation. The Fund is a diversified, open-end
management investment company registered under the Investment Company Act of
1940, as amended (the "1940 Act"). The Fund's primary objective is long term
capital appreciation. The Fund commenced investment operations on July 11, 1994.
2. Significant Accounting Policies. The preparation of financial statements in
accordance with generally accepted accounting principles requires management to
make estimates and assumptions that affect the reported amounts and disclosures
in the financial statements. Actual results could differ from those estimates.
The following is a summary of significant accounting policies followed by the
Fund in the preparation of its financial statements.
Security Valuation. Portfolio securities listed or traded on a nationally
recognized securities exchange, quoted by the National Association of Securities
Dealers Automated Quotations, Inc. ("Nasdaq") or traded on foreign exchanges are
valued at the last sale price on that exchange as of the close of business on
the day the securities are being valued (if there were no sales that day, the
security is valued at the average of the closing bid and asked prices or, if
there were no asked prices quoted on that day, then the security is valued at
the closing bid price on that day, except for open short positions, which are
valued at the last asked price). All other portfolio securities for which
over-the-counter market quotations are readily available are valued at the
latest average of the bid and asked prices. Portfolio securities traded on more
than one national securities exchange or market are valued according to the
broadest and most representative market, as determined by Gabelli Funds, LLC
(the successor to Gabelli Funds, Inc. as investment adviser) (the "Adviser").
Securities and assets for which market quotations are not readily available are
valued at their fair value as determined in good faith under procedures
established by and under the general supervision of the Board of Directors.
Short term debt securities with remaining maturities of 60 days or less are
valued at amortized cost, unless the Directors determine such does not reflect
the securities' fair value, in which case these securities will be valued at
their fair value as determined by the Directors. Debt instruments having a
greater maturity are valued at the highest bid price obtained from a dealer
maintaining an active market in those securities. Options are valued at the last
sale price on the exchange on which they are listed. If no sales of such options
have taken place that day, they will be valued at the mean between their closing
bid and asked prices.
Repurchase Agreements. The Fund may enter into repurchase agreements with
primary government securities dealers recognized by the Federal Reserve Bank of
New York, with member banks of the Federal Reserve System or with other brokers
or dealers that meet credit guidelines established by the Directors. Under the
terms of a typical repurchase agreement, the Fund takes possession of an
underlying debt obligation subject to an obligation of the seller to repurchase,
and the Fund to resell, the obligation at an agreed-upon price and time, thereby
determining the yield during the Fund's holding period. The Fund will always
receive and maintain securities as collateral whose market value, including
accrued interest, will be at least equal to 100% of the dollar amount invested
by the Fund in each agreement. The Fund will make payment for such securities
only upon physical delivery or upon evidence of book entry transfer of the
collateral to the account of the custodian. To the extent that any repurchase
transaction exceeds one business day, the value of the collateral is
marked-to-market on a daily basis to maintain the adequacy of the collateral. If
the seller defaults and the value of the collateral declines or if bankruptcy
proceedings are commenced with respect to the seller of the security,
realization of the collateral by the Fund may be delayed or limited.
11
<PAGE>
Gabelli Gold Fund, Inc.
Notes to Financial Statements (Continued) (Unaudited)
================================================================================
Forward Foreign Exchange Contracts. The Fund may engage in forward foreign
exchange contracts for hedging a specific transaction with respect to either the
currency in which the transaction is denominated or another currency as deemed
appropriate by the Adviser. Forward foreign exchange contracts are valued at the
forward rate and are marked-to-market daily. The change in market value is
included in unrealized appreciation/depreciation on investments and foreign
currency transactions. When the contract is closed, the Fund records a realized
gain or loss equal to the difference between the value of the contract at the
time it was opened and the value at the time it was closed.
The use of forward foreign exchange contracts does not eliminate fluctuations in
the underlying prices of the Fund's portfolio securities, but it does establish
a rate of exchange that can be achieved in the future. Although forward foreign
exchange contracts limit the risk of loss due to a decline in the value of the
hedged currency, they also limit any potential gain that might result should the
value of the currency increase. In addition, the Fund could be exposed to risks
if the counterparties to the contracts are unable to meet the terms of their
contracts.
Foreign Currency Translation. The books and records of the Fund are maintained
in United States (U.S.) dollars. Foreign currencies, investments and other
assets and liabilities are translated into U.S. dollars at the exchange rates
prevailing at the end of the period, and purchases and sales of investment
securities, income and expenses are translated at the exchange rate prevailing
on the respective dates of such transactions. Unrealized gains and losses, which
result from changes in foreign exchange rates and/or changes in market prices of
securities, have been included in unrealized appreciation/depreciation on
investments and foreign currency transactions. Net realized foreign currency
gains and losses resulting from changes in exchange rates include foreign
currency gains and losses between trade date and settlement date on investment
securities transactions, foreign currency transactions and the difference
between the amounts of interest and dividends recorded on the books of the Fund
and the amounts actually received. The portion of foreign currency gains and
losses related to fluctuation in exchange rates between the initial trade date
and subsequent sale trade date is included in realized gain/(loss) on
investments.
Securities Transactions and Investment Income. Securities transactions are
accounted for on the trade date with realized gain or loss on investments
determined by using the identified cost method. Interest income (including
amortization of premium and accretion of discount) is recorded as earned.
Dividend income is recorded on the ex-dividend date.
Dividends and Distributions to Shareholders. Dividends and distributions, if
any, to shareholders are recorded on the ex-dividend date. Income distributions
and capital gain distributions are determined in accordance with income tax
regulations which may differ from generally accepted accounting principles.
These differences are primarily due to differing treatments of income and gains
on various investment securities held by the Fund, timing differences and
differing characterization of distributions made by the Fund.
Provision for Income Taxes. The Fund has qualified and intends to continue to
qualify as a regulated investment company under Subchapter M of the Internal
Revenue Code of 1986, as amended. As a result, a Federal income tax provision is
not required.
Dividends and interest from non-U.S. sources received by the Fund are generally
subject to non-U.S. withholding taxes at rates ranging up to 30%. Such
withholding taxes may be reduced or eliminated under the
12
<PAGE>
Gabelli Gold Fund, Inc.
Notes to Financial Statements (Continued) (Unaudited)
================================================================================
terms of applicable U.S. income tax treaties, and the Fund intends to undertake
any procedural steps required to claim the benefits of such treaties. If the
value of more than 50% of the Fund's total assets at the close of any taxable
year consists of stocks or securities of non-U.S. corporations, the Fund is
permitted and may elect to treat any non-U.S. taxes paid by it as paid by its
shareholders.
The Fund has a net capital loss carryforward for Federal income tax purposes at
December 31, 1998 of $4,787,682. This capital loss carryforward is available to
reduce future distributions of net capital gains to shareholders. $6,761 of the
loss carryforward is available through 2002; $307,937 is available through 2003;
$491,124 is available through 2004; $1,244,045 is available through 2005; and
$2,737,815 is available through 2006.
3. Investment Advisory Agreement. The Fund has entered into an investment
advisory agreement (the "Advisory Agreement") with the Adviser which provides
that the Fund will pay the Adviser a fee, computed daily and paid monthly, at
the annual rate of 1.00% of the value of the Fund's average daily net assets. In
accordance with the Advisory Agreement, the Adviser provides a continuous
investment program for the Fund's portfolio, oversees the administration of all
aspects of the Fund's business and affairs and pays the compensation of all
Officers and Directors of the Fund who are its affiliates.
4. Distribution Plan. The Fund's Board of Directors has adopted a distribution
plan (the "Plan") pursuant to Rule 12b-1 under the 1940 Act. For the six months
ended June 30, 1999, the Fund incurred distribution costs payable to Gabelli &
Company, Inc., an affiliate of the Adviser, of $14,499, or 0.25% of average
daily net assets, the annual limitation under the Plan. Such payments are
accrued daily and paid monthly.
5. Organizational Expenses. The organizational expenses of the Fund are being
amortized on a straight-line basis over a period of 60 months.
6. Portfolio Securities. Purchases and sales of securities for the six months
ended June 30, 1999, other than short term securities, aggregated $3,023,720 and
$1,261,809, respectively.
7. Line of Credit. The Fund has access to an unsecured line of credit from the
custodian for temporary borrowing purposes. Borrowings under this arrangement
bear interest at 0.75% above the Federal Funds rate on outstanding balances.
There were no borrowings outstanding at June 30, 1999.
The average daily amount of borrowings outstanding during the six months ended
June 30, 1999 was $273,333, with a related weighted average interest rate of
5.59%. The maximum amount borrowed at any time during the six months ended June
30, 1999 was $410,000.
8. Capital Stock Transactions. Transactions in shares of capital stock were as
follows:
<TABLE>
<CAPTION>
Six Months Ended Year Ended
June 30, 1999 December 31, 1998
-------------------------- --------------------------
Shares Amount Shares Amount
------ ------ ------ ------
<S> <C> <C> <C> <C>
Shares sold .................................... 1,954,352 $ 11,489,328 9,430,921 $ 59,452,171
Shares issued upon reinvestment of dividends ... -- -- -- --
Shares redeemed ................................ (1,521,144) (8,785,633) (8,819,870) (54,831,728)
---------- ------------ ---------- ------------
Net increase ................................. 433,208 $ 2,703,695 611,051 $ 4,620,443
========== ============ ========== ============
</TABLE>
13
<PAGE>
Gabelli Gold Fund, Inc.
Financial Highlights
================================================================================
Selected data for a share of capital stock outstanding throughout each period:
<TABLE>
<CAPTION>
Six Months Ended Year Ended December 31,
June 30, 1999 -----------------------------------------------------------
(Unaudited) 1998 1997 1996 1995 1994+
----------- ---- ---- ---- ---- -----
<S> <C> <C> <C> <C> <C> <C>
Operating performance:
Net asset value, beginning of period .......... $ 5.66 $ 5.87 $ 12.32 $ 11.41 $ 11.07 $ 10.00
------- ------- ------- ------- ------- -------
Net investment loss ........................... (0.01) (0.03) (0.26) (0.19)(a) (0.15)(a) 0.00(a)
Net realized and unrealized gain (loss)
on investments .............................. (0.26) (0.18) (6.13) 1.10 0.49 1.07(b)
------- ------- ------- ------- ------- -------
Total from investment operations .............. (0.27) (0.21) (6.39) 0.91 0.34 1.07
------- ------- ------- ------- ------- -------
Distributions to shareholders:
In excess of net investment income ............ -- -- (0.06) -- -- --
------- ------- ------- ------- ------- -------
Total distributions ........................... -- -- (0.06) -- -- --
------- ------- ------- ------- ------- -------
Net asset value, end of period ................ $ 5.39 $ 5.66 $ 5.87 $ 12.32 $ 11.41 $ 11.07
======= ======= ======= ======= ======= =======
Total return++ ................................ (4.8)% (3.6)% (51.9)% 8.0% 3.1% 10.7%
======= ======= ======= ======= ======= =======
Ratios to average net assets and supplemental data:
Net assets, end of period (in 000's) .......... $13,054 $11,276 $ 8,097 $16,963 $14,510 $17,634
Ratio of net investment loss
to average net assets ....................... (1.53)%(c) (1.82)% (2.60)% (1.41)% (1.12)% (0.26)%(c)
Ratio of operating expenses
to average net assets (d) ................... 3.01%(c) 2.98% 3.24% 2.17% 2.25% 2.04%(c)
Portfolio turnover rate ....................... 11% 63% 27% 54% 38% 12%
</TABLE>
- ----------
+ From commencement of operations on July 11, 1994.
++ Total return represents aggregate total return of a hypothetical $1,000
investment at the beginning of the period and sold at the end of the
period including reinvestment of dividends. Total return for the period of
less than one year is not annualized.
(a) Based on average month-end shares outstanding.
(b) Includes the effect of realized gains prior to significant increases in
shares outstanding.
(c) Annualized.
(d) The Fund incurred interest expense during the six months ended June 30,
1999 and the years ended December 31, 1998 and 1997. If interest expense
had not been incurred, the ratios of operating expenses to average net
assets would have been 3.00%, 2.93% and 3.10%, respectively. In addition,
the ratio for the year ended December 31, 1997 does not include a
reduction of expenses for custodian fee credits. Including such credits,
the ratio would have been 3.23%.
See accompanying notes to financial statements.
14
<PAGE>
Gabelli Family of Funds
Gabelli Asset Fund _____________________________________________________________
Seeks to invest primarily in a diversified portfolio of common stocks selling at
significant discounts to their private market value. The Fund's primary
objective is growth of capital. (No-load)
Portfolio Manager: Mario J. Gabelli, CFA
Gabelli Growth Fund ____________________________________________________________
Seeks to invest primarily in large cap stocks believed to have favorable, yet
undervalued, prospects for earnings growth. The Fund's primary objective is
capital appreciation. (No-Load)
Portfolio Manager: Howard F. Ward, CFA
Gabelli Westwood Equity Fund ___________________________________________________
Seeks to invest primarily in the common stock of seasoned companies believed to
have proven records and above average historical earnings growth. The Fund's
primary objective is capital appreciation. (No-load)
Portfolio Manager: Susan M. Byrne
Gabelli Small Cap Growth Fund __________________________________________________
Seeks to invest primarily in common stock of smaller companies (market
capitalizations less than $500 million) believed to have rapid revenue and
earnings growth potential. The Fund's primary objective is capital appreciation.
(No-load) Portfolio Manager: Mario J. Gabelli, CFA
Gabelli Westwood SmallCap Equity Fund __________________________________________
Seeks to invest primarily in smaller capitalization equity securities - market
caps of $1 billion or less. The Fund's primary objective is long-term capital
appreciation. (No-load)
Portfolio Manager: Lynda Calkin, CFA
Gabelli Westwood Intermediate Bond Fund ________________________________________
Seeks to invest in a diversified portfolio of bonds with various maturities. The
Fund's primary objective is total return. (No-load)
Portfolio Manager: Patricia Fraze
Gabelli Equity Income Fund _____________________________________________________
Seeks to invest primarily in equity securities with above market average yields.
The Fund pays quarterly dividends and seeks a high level of total return with an
emphasis on income. (No-load)
Portfolio Manager: Mario J. Gabelli, CFA
Gabelli Westwood Balanced Fund _________________________________________________
Seeks to invest in a balanced and diversified portfolio of stocks and bonds. The
Fund's primary objective is both capital appreciation and current income.
(No-load) Portfolio Managers: Susan M. Byrne & Patricia Fraze
Gabelli Westwood Mighty Mites(SM) Fund _________________________________________
Seeks to invest in micro-cap companies that have market capitalizations of $300
million or less. The Fund's primary objective is long-term capital appreciation.
(No-Load) Team Managed: Mario J. Gabelli, CFA, Marc J. Gabelli,
Laura K. Linehan and Walter K. Walsh
Gabelli Value Fund _____________________________________________________________
Seeks to invest in securities of companies believed to be undervalued. The
Fund's primary objective is long-term capital appreciation. Max. Sales charge:
5-1/2% Portfolio Manager: Mario J. Gabelli, CFA
Gabelli ABC Fund ______________________________________________________________
Seeks to invest in securities with attractive opportunities for appreciation or
investment income. The Fund's primary objective is total return in various
market conditions without excessive risk of capital loss. (No-load)
Portfolio Manager: Mario J. Gabelli, CFA
Gabelli U.S. Treasury Money Market Fund ________________________________________
Seeks to invest exclusively in short-term U.S. Treasury securities. The Fund's
primary objective is to provide high current income consistent with the
preservation of principal and liquidity. (No-load)
Portfolio Manager: Judith A. Raneri
The Treasurer's Fund ___________________________________________________________
Three money market portfolios designed to generate superior returns without
compromising portfolio safety. U.S. Treasury Money Market seeks to invest in
U.S. Treasury bills, notes and bonds. Tax Exempt Money Market seeks to invest in
municipal securities. Domestic Prime Money Market seeks to invest in prime
quality, domestic money market instruments. (No-Load)
Portfolio Manager: Judith A. Raneri
An investment in the above Money Market Funds are neither insured nor guaranteed
by the Federal Deposit Insurance Corporation or any government agency. Although
the funds seek to preserve the value of your investment at $1.00 per share, it
is possible to lose money by investing in the Funds.
Global Series
Gabelli Global Telecommunications Fund
Seeks to invest in telecommunications companies throughout the world -
targeting undervalued companies with strong earnings and cash flow
dynamics. The Fund's primary objective is capital appreciation. (No-load)
Team Manager: Mario J. Gabelli, CFA
Gabelli Global Convertible Securities Fund
Seeks to invest principally in bonds and preferred stocks which are
convertible into common stock of foreign and domestic companies. The
Fund's primary objective is total return through a combination of current
income and capital appreciation. (No-load) Portfolio Manager: Hart Woodson
Gabelli Global Interactive Couch Potato(R)Fund
Seeks to invest in securities of companies involved with communications,
creativity and copyright. The Fund also seeks to invest in companies
participating in emerging technological advances in interactive services
and products. The Fund's primary objective is capital appreciation.
(No-load) Portfolio Manager: Marc J. Gabelli
Gabelli Global Opportunity Fund
Seeks to invest in common stock of companies which have rapid growth in
revenues and earnings and potential for above average capital appreciation
or are undervalued. The Fund's primary objective is capital appreciation.
(No-load) Portfolio Managers: Marc J. Gabelli & Caesar Bryan
Gabelli Gold Fund ______________________________________________________________
Seeks to invest in a global portfolio of equity securities of gold mining and
related companies. The Fund's objective is long-term capital appreciation.
Investment in gold stocks is considered speculative and is affected by a variety
of world-wide economic, financial and political factors. (No-load)
Portfolio Manager: Caesar Bryan
Gabelli International Growth Fund ______________________________________________
Seeks to invest in the equity securities of foreign issuers with long-term
capital appreciation potential. The Fund offers investors global
diversification. (No-load) Portfolio Manager: Caesar Bryan
The six funds above invest in foreign securities which involves risks not
ordinarily associated with investments in domestic issues, including currency
fluctuation, economic and political risks.
The Funds listed above are distributed by Gabelli & Company, Inc.
- --------------------------------------------------------------------------------
To receive a prospectus, call 1-800-GABELLI (422-3554). The prospectus
gives a more complete description of the Fund, including fees and
expenses. Read the prospectus carefully before you invest or send money.
1-800-GABELLI
(1-800-422-3554) o fax: 1-914-921-5118 o www.gabelli.com o [email protected]
One Corporate Center, Rye, New York 10580
<PAGE>
Gabelli Gold Fund, Inc.
One Corporate Center
Rye, New York 10580-1434
1-800-GABELLI
[1-800-422-3554]
fax: 1-914-921-5118
http://www.gabelli.com
e-mail: [email protected]
(Net Asset Value may be obtained daily by calling
1-800-GABELLI after 6:00 P.M.)
Board of Directors
Mario J. Gabelli, CFA Werner J. Roeder, MD
Chairman and Chief Medical Director
Investment Officer Lawrence Hospital
Gabelli Asset Management Inc.
Anthonie C. van Ekris
E. Val Cerutti Managing Director
Chief Executive Officer BALMAC International, Inc.
Cerutti Consultants, Inc.
Daniel E. Zucchi
Anthony J. Colavita President
Attorney-at-Law Daniel E. Zucchi Associates
Anthony J. Colavita, P.C.
Karl Otto Pohl
Former President
Deutsche Bundesbank
Officers and Portfolio Managers
Caesar Bryan Bruce N. Alpert
President and Vice President
Portfolio Manager and Treasurer
James E. McKee
Secretary
Distributor
Gabelli & Company, Inc.
Custodian, Transfer Agent and Dividend Agent
State Street Bank and Trust Company
Legal Counsel
Willkie Farr & Gallagher
- --------------------------------------------------------------------------------
This report is submitted for the general information of the shareholders of
Gabelli Gold Fund, Inc. It is not authorized for distribution to prospective
investors unless preceded or accompanied by an effective prospectus.
- --------------------------------------------------------------------------------
GAB008Q299SR
