Xetra-Gold

Transparent, inexpensive and secure - Xetra-Gold is now the best-known gold investment with physical deposit in Germany. It is traded in Euro per gram. The possibility of delivery is an actively used speciality.

Xetra-Gold® is a no-par value bond issued by Deutsche Börse Commodities GmbH denominated in gold. The bond is an exchange-traded security in the form of a bearer bond that securitizes a claim to the delivery of gold. Each individual Xetra Gold partial bond grants investors the right to demand delivery of one gram of gold from the issuer. For Xetra-Gold bonds, the issuer maintains a corresponding amount of gold in physical form and, to a limited extent, in the form of book gold claims. In the form of a security, Xetra gold is fungible and as easily transferable as a share.

Xetra-Gold is traded on Xetra. The quotation is based on the current gold price in US dollars and the exchange rate between US dollars and euros.

Deutsche Bank and Commerzbank are among the designated sponsors. AG. A Designated Sponsor enables liquid continuous trading: during trading hours, it provides binding bid and ask prices at all times and guarantees permanent quotation under normal trading conditions.

Xetra-Gold has been offered since December 2007. 200 tons of gold are now stored in the vault.

Advantages of Xetra-Gold

Xetra-Gold is a cheap and easy way to participate in the development of the gold market.

• Cost-effective because there is no front-end load, no transport and insurance costs as are incurred with the purchase of physical gold. Only the usual transaction costs for stock exchange trading in securities are payable on purchase. The buying and selling spreads are in line with world market conditions and are significantly lower than for traditional gold-based financial products. Instead of a management fee, which would reduce the value of a normal gold fund over time, only separately reported custody fees of 0.36 percent per annum are charged.
   
• Simply because Xetra-Gold is traded like a security on Xetra, one of the most efficient European platforms. This means liquid, continuous trading in the regulated market with high transparency, daily from 9 am to 5.30 pm.
   
• Physically stored: With the proceeds from the Xetra-Gold issue, the issuer acquires gold in physical form and, to a limited extent, book gold claims. The physical gold will be held for the Issuer by Clearstream Banking AG, a wholly-owned subsidiary of Deutsche Börse AG, in its vaults in Frankfurt. The issuer's book gold claims exist against Umicore AG & Co. KG.
   
• Transparent: Xetra-Gold represents the gold price almost one-to-one, and always up-to-date.
   
• Tradable in Euro per gram: While gold was previously mainly denominated in US dollars per ounce, you trade Xetra gold in Euro per gram.
   
• Stable inventory: The investor's right to delivery of the securitised amount of gold is not reduced by deducting management costs or other fees as is the case with other investments in gold. 1,000 Xetra-Gold bonds securitize one kilogram of gold even in 30 years.
   
• Redemption against Gold: Investors may at any time assert their claim to delivery of the securitised amount of gold against the Issuer. If he is prevented from doing so by legal restrictions applicable to him, he may demand that the Issuer pay out Xetra gold in cash instead of delivering gold. Within the first ten years, a good 1,000 investors have also done so.

Trade and exercise

Xetra-Gold is traded on Xetra and is listed in the General Standard of the Regulated Market. Designated sponsors are Commerzbank, Flow Traders, Deutsche Bank, Virtu, Optiver, IMC. Designated Sponsors act as market makers and ensure the permanent tradability of Xetra gold between 9:00 a.m. and 5:30 p.m. up to a minimum volume of 100,000 euros with a maximum bid-ask spread of 1 percent. In most cases, however, the actual spread is significantly lower. In addition, Designated Sponsors undertake that at times when trading takes place on the London Bullion Market Association (the main market for gold in the European time zone), the average price there will always be within the bid-ask spread quoted by Deutsche Börse.

Investors can buy and sell small and medium quantities of Xetra gold via Xetra at any time. The market makers guarantee low spreads in all market situations - the spreads observed on the London bullion market can generally be maintained. Via Xetra, orders up to 100,000 Euros can be executed immediately within the published bid-ask spread.

Delivery of gold

If investors assert their claim to delivery of the securitised quantity of gold against the issuer, Umicore AG & Co. KG, which is responsible for all physical delivery processes. In addition, the issuer is entitled to claim damages against Umicore AG & Co. KG as book gold debtor. Information on delivery and the alternative payment claim relevant for investment companies and insurers can be found in the PDF "Notes on the Process of Exercising Xetra-Gold".

Insurance companies may acquire Xetra-Gold

Xetra-Gold is also suitable for institutional investors due to its conformity with European regulations for securities investments (so-called UCITS conformity). Since 29 June 2010, insurance companies in Germany have also been permitted to acquire up to 5 percent Xetra gold for their tied assets within the framework of the raw material quota thanks to an amendment by BaFin to the Ordinance on the Investment of Tied Assets of Insurance Companies. For details see Factsheet "Acquisition through insurance".

Exempt from withholding tax

Good news for Xetra gold investors: profits are tax-free after a minimum holding period of twelve months. After the Federal Fiscal Court, Germany's highest financial court, had already ruled in 2015 that Xetra-Gold was not a capital claim but a claim in kind, in 2016 the tax authorities joined this case law with their BMF letter on the final withholding tax. The acquisition and the redemption or the sale were to be assessed for tax purposes as the acquisition and sale of physical gold – such as gold bars or coins.