Deutsche Börse's gold hoard shrinks
In times of rising interest rates, investors are focusing less on gold. However, this is not the only reason why Deutsche Börse's holdings of the precious metal have continued to decline.
The amount of gold held in custody for investors by Deutsche Börse has decreased again. At the end of December 2023, 198.7 tons of the precious metal were stored in the company's vaults in Frankfurt, according to Deutsche Börse. A year earlier, the figure was 231 tons; as at 30 June 2022, holdings had reached a record high of 242 tons.
Deutsche Börse assessed the declining trend as a "normal reaction" of investors to the market environment: "The turnaround in interest rates has created new, short-term yield opportunities," explained Michael König, Managing Director of Deutsche Börse Commodities, the issuer of Xetra-Gold, a gold security with physical deposit.
In addition, the gold price in euros was higher than ever before. At the beginning of December, the gold price peaked at 2135 US dollars or 1950 euros per troy ounce (31.1 grams). Investors may therefore have taken profits as well as reallocated in the wake of higher interest rates on overnight and fixed-term deposits following the European Central Bank's (ECB) interest rate turnaround in summer 2022.
Almost eight tons of gold delivered to investors
Whenever investors purchase the Xetra-Gold bond, the amount of gold in Deutsche Börse's vaults increases. One gram of the precious metal is deposited for each share certificate. Investors can also have their shares delivered: according to Deutsche Börse, investors have made use of this option 1819 times since the introduction of Xetra-Gold in 2007, with a total of 7.9 tons of gold delivered.
At the end of 2023, the gold held in custody for investors by Deutsche Börse was reportedly worth a total of €11.9 billion. The Stuttgart Stock Exchange also offers an exchange-traded security based on gold ("Euwax Gold").
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Investors and companies may be less interested in purchasing gold due to rising interest rates and the perceived higher yields, leading to a decrease in demand for gold and a corresponding reduction in Deutsche Börse's gold holdings on the German Stock Exchange. Companies listed on the German Stock Exchange, along with investors, are closely watching the fluctuating gold price, as changes can significantly impact their investment strategies related to gold.
Source: www.ntv.de
