Xetra-Gold holdings reach 180 tonnes

The bullions stored to back up the Xetra-Gold bearer bond reached a volume of 180 tonnes for the very first time today. By the tenth anniversary of Europe's most successful gold-based and physically backed ETC towards the end of 2017, the gold holdings had exceeded 170 tonnes.

A difficult Q1 2018 for gold investments

While overall demand for gold decreased by 7 per cent in the first months of the current year, the investment sector declined more significantly. Global demand for gold-based ETFs and ETCs fell by 66 per cent year-on-year during this period. Interest in bullions and gold coins as assets also decreased by a total of 15 per cent, while demand for gold jewellery remained virtually unchanged.

Xetra-Gold successfully bucked the trend

While demand for gold investments in the important gold markets of China and India declined by 26 per cent and 17 per cent, respectively, gold-based ETFs and ETCs in Europe witnessed outflows of 1.2 tonnes. At the same time, demand for physical gold in Europe also decreased sharply by 39 per cent. During this period, the gold holdings of Xetra-Gold increased to 177.4 tonnes. A possible explanation lies in the special product features of the ETC: Xetra-Gold can be bought, held and sold with lower transaction costs than bullions, especially in short- or medium-term investments, offering an advantage for investors wishing to act on geopolitical and market-related events cost-efficiently. At the same time, the facts that Xetra-Gold is backed with physical gold and gives the owner the right to demand redemption provide a sense of security otherwise offered only by bullions and gold coins. However, with the demand of redemption for gold, additional costs are incurred which investors should always take into account.