Precious metal: Gold investors are cashing in after a sharp price increase

After the sharp rise in the price of gold in 2024, many investors are cashing in. The gold inventory held at Deutsche Börse for the exchange-traded security Xetra-Gold fell significantly to 166.5 tons at the end of the year. That is around 32 tons less than at the end of 2023, as the DAX group announced. “Especially in the last few months, the high price of gold, among other things, has stimulated sales,” says Steffen Orben, Managing Director of Deutsche Börse Commodities GmbH, issuer of Xetra-Gold.

Xetra-Gold is a physically secured security. Whenever investors purchase the bearer bond, the gold inventory in the central vault of the Deutsche Börse increases: one gram of the precious metal is deposited for each share certificate. According to the company, Xetra-Gold is Europe’s largest gold security with physical deposit.

Gold prices went through the roof in 2024

Last year, gold brought huge profits to investors. The price of gold rose by around 27 percent within twelve months and reached a record high of $2,790 per troy ounce (around 31.1 grams) at the end of October before falling slightly. The reason for the boom was the many crises worldwide, for example in the Middle East, and the prospect of falling key interest rates from central banks. There are no interest or dividends on gold. Therefore, falling yields on government bonds, for example, increase demand for the precious metal.

While the gold holdings at Deutsche Börse shrank, the assets under management at Xetra-Gold rose sharply as a result of the price increase: they increased by 13 percent compared to the previous year to around 13.5 billion euros.

Gold popular crisis currency

For investors, gold securities are a popular alternative to gold bars and coins. The Stuttgart Stock Exchange also offers an exchange-traded security based on gold (“Euwax Gold”). Many asset managers recommend gold as an addition to the portfolio and as protection against crises.