The best currency hedge: buying gold in EUR and per gram!

News Arnulf Hinkel, Financial journalist – 10.10.2016

Almost all daily media report on the gold price in US dollars (XAU/USD), giving readers the impression that this would have to be the original gold price, valid worldwide. This – false – view can be explained historically: not only had gold been seen as a currency of its own since the ancient times, but the gold price was actually linked to the US dollar until some 40 years ago. Today, however, this is completely different, since the gold tradable in the eurozone, as well as most gold-based securities, are denominated in euro. The relevant gold price is expressed in euro per gram. Not only is the currency sovereignty of the eurozone thereby recognized, but also the only globally valid measure of gold: its weight – measured in grams, not in troy ounces, as in the US. A troy ounce fine, by the way, equals 31.1035 grams.

However, there are also gold products tradable on the European market which are denominated in US-dollar and measured in troy ounces. In addition, investors can purchase so-called Quantos – securities representing the percentage appreciation of gold in US-dollar as yield in euro. Although these Quantos are often referred to as products offering currency hedging, the investor usually speculates on both the increase in gold and the depreciation of the US-dollar. This product complexity has to be paid, however, in the form of fees which in turn hurt the return on the securities. Quantos on gold are only suitable for real risk takers who want to participate not only in the development of the gold price, but at the same time profit from movements of the Euro/US-dollar currency pair – a highly speculative form of investment that is in total contradiction to the main function of gold, which is to increase the stability of an asset portfolio and to reduce risk by investment diversification. Hence, it is only logical to effectively eliminate currency risks right from the start of an investment: with the purchase of gold securities in euro.

Upcoming Events

Events

22.10.2020 - 22.10.2020 Investment Fund Day of Börsen-Zeitung Frankfurt

Digital Conference

Events

02.11.2020 - 03.11.2020 Private Wealth Excellence Forum

Youtube channel

Production of Umicore precious metal bars

Production of Umicore precious metal bars

Opening Bell Event zum 10-jährigen Bestehen von Xetra-Gold (German)

Opening Bell Event zum 10-jährigen Bestehen von Xetra-Gold (German)

Gold als eigene Anlageklasse: Interview mit Steffen Orben (German)

Gold als eigene Anlageklasse: Interview mit Steffen Orben (German)

Please select the optional cookies to activate Youtube.

Newsletter

Are you interested in receiving regular information on Xetra-Gold? Then subscribe to our monthly, free-of-charge newsletter to learn more about our gold holdings, upcoming events and to read our gold market outlook.

Required mandatory fields are marked with an asterisk (*).

Your data, collected for the purpose of sending the above information, will be processed in accordance with the DSGVO, i.e. they are used exclusively for the purposes mentioned above. The data will not be passed on to third parties. You can unsubscribe from our information services at any time using the unsubscribe function.

Further information is available in our complete data protection declaration.

Xetra-Gold Newsletter

We are sorry that you consider to unregister from our newsletter. Are you missing out information? If yes, we are pleased to receive your feedback. Of course, you can always re-register at any later point of time.

Required mandatory fields are marked with an asterisk (*).

Your data, collected for the purpose of sending the above information, will be processed in accordance with the DSGVO, i.e. they are used exclusively for the purposes mentioned above. The data will not be passed on to third parties. You can unsubscribe from our information services at any time using the unsubscribe function.

Further information is available in our complete data protection declaration.

Xetra-Gold Newsletter

Xetra-Gold Hotline

Xetra-Gold-Hotline

Do you have questions? We have the answers. Contact us here: 9 a.m.–6 p.m. CET

+49-(0) 69-2 11-1 16 70

xetra-gold@deutsche-boerse.com

For press inquiries:media-relations@deutsche-boerse.com

To contact form