Xetra-Gold records new high in gold holdings at year’s end
117.6 tons held in custody / increase of 99 per cent in the course of the year
The gold holdings of the Xetra-Gold bond nearly doubled in 2016 and at 117.6 tons yielded a new all-time high at the end of December. In early January 2016, gold held in custody stood at 59.2 tons. Gold holdings of Xetra-Gold increase when investors buy Xetra-Gold bonds via the stock exchange. For each Xetra-Gold note, exactly one gram of gold is deposited in the central vaults for German securities in Frankfurt.
“The significant rise since the beginning of 2016 is due especially to demand by institutional investors. Both the Brexit vote and the US presidential election have unsettled investors and led to a rise in demand for gold, as did the ECB’s low interest rate policy”, says Michael König, Managing Director of Deutsche Börse Ccommodities GmbH, the issuer of Xetra-gold.
Among all exchange-traded commodities (ETCs) tradable on Xetra, Xetra-Gold is by far the most successful in terms of turnover. During the entire year 2016, order book turnover on Xetra stood at approximately €2.7 billion. The assets managed by Xetra-Gold currently amount to €4.2 billion.
Xetra-Gold investors are entitled to the delivery of the certified amount of physical gold at any time. Since the introduction of Xetra-Gold in 2007, investors have exercised this right more than 900 times, with a total of 4.6 tons of gold delivered.
In September 2015, the German Federal Fiscal Court (Bundesfinanzhof) had ruled that after a minimum holding period of one year, any profits from the sale or redemption of Xetra-Gold are not subject to the capital gains tax. From a fiscal point of view, the purchase, redemption or sale are thus to be treated equal to a direct purchase or sale of physical gold, such as in bullions or coins.
Xetra-Gold (ISIN: DE000A0S9GB0) is a 100 per cent gold-backed exchange-traded commodity (ETC) issued by Deutsche Börse Commodities GmbH that represents the right to the delivery of physical gold. Each individual Xetra-Gold bearer note grants the investor the right to demand the delivery of one gram of gold from the issuer. The issuer holds a corresponding amount of physical gold and a limited amount of account gold rights for each Xetra-Gold note. The fact that Xetra-Gold takes the form of a security makes it fungible and easy to trade.
Insurance companies in Germany are also allowed to purchase Xetra-Gold for their restricted assets up to the amount of up to 5 per cent of their commodities investment. The international derivatives exchange Eurex offers futures and options on Xetra-Gold. Xetra-Gold is admitted for sale to the public in Germany, Austria, Luxembourg, the UK and the Netherlands. The full details of the Xetra-Gold ETC, especially the terms and conditions, and information on the issuer can be found in the prospectus; this, and any supplements, can be obtained free of charge from Deutsche Börse Commodities GmbH, Mergenthalerallee 61, 65760 Eschborn, Germany, or can be downloaded at www.xetra-gold.com.
About Deutsche Börse Commodities GmbH
The Xetra-Gold issuer Deutsche Börse Commodities GmbH, based in Eschborn, is a joint venture between Deutsche Börse AG and the banking partners Commerzbank AG, Deutsche Bank AG, DZ Bank AG, B. Metzler seel. Sohn & Co. KGaA, and Swiss-based bank Vontobel. Umicore AG & Co. KG, a group subsidiary of Umicore S.A. which operates several gold refineries across the globe and manufactures gold bars, is also a partner. The issuer’s sole business purpose is to provide the market with Xetra-Gold, the exchange-traded commodity (ETC) backed 100 per cent with physical gold, and to enable efficient, transparent and cost-effective trading of this securitisation of physical gold.