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The Steinbeis School of Management and Innovation, Berlin, has conducted a study on the costs associated with purchasing and trading gold in Germany, looking at different investment opportunities, volumes and time horizons.
The study concluded that for short and medium-term investments in gold, the purchase of physically backed ETCs is the most cost-effective option. Among these products, Xetra Gold has the lowest total costs. Considerably more expensive according to the study are ETCs that only secure a claim to payment but are not backed by physical gold.
In comparison to gold from precious metal traders, physically backed gold ETCs with subsequent delivery are a better deal – though only at quantities of around five kilos and above.
“The Steinbeis study proves that investors in Xetra Gold have one of the most cost-effective opportunities to acquire and trade physical gold. The low overall costs are due not least to a very low spread between purchase and sales price, which generally stands at only 0.1 percent. There is no ETC at Deutsche Börse that is traded more liquidly than Xetra Gold,” said Martina Gruber, managing director at Deutsche Börse Commodities GmbH. “In addition to the low overall costs, investors value Xetra Gold's simple construction. It tracks the spot price of one gram of gold in euros and is physically deliverable at the same time."
Deutsche Börse Commodities GmbH holds 53.3 tons of gold worth over €2.3 billion (as at: 31 October 2012).
