Eurex to Offer Euro Gold Contract
Futures and options on Xetra-Gold to be launched on 28 September 2010
Eurex: The international derivatives exchange Eurex today announced that it will launch futures and options on Xetra-Gold, the leading exchange-traded commodity (ETC) in Germany by order book turnover. The new gold contracts are set to launch on 28 September 2010.
Xetra-Gold is a zero-coupon bond denominated in euro and issued by Deutsche Börse Commodities GmbH. Launched in December 2007, Xetra-Gold is traded on Xetra®, Deutsche Börse AG’s pan-European electronic trading platform for the cash market.
“Commodities are a widely used asset class for its diversification benefits and low correlation to other markets. In particular, gold tends to be a popular investment as it’s considered a safe haven during uncertain economic times. Combining two benchmark currencies, euro and gold, in a single product, Xetra-Gold has proven to be a highly liquid and widely traded instrument among European investors. The new futures and options give our members further access to the gold market and will provide more flexibility to suit their specific needs,” said Peter Reitz, Eurex Executive Board member. “Furthermore, Eurex Clearing will accept Xetra-Gold as collateral starting on 27 August.”
The Xetra-Gold derivatives are the latest addition to Eurex’s precious metals derivatives. Since February 2009, Eurex has been offering US-dollar denominated gold futures and options based on fixing prices of the London Bullion Market. Silver futures and options based on the London Silver Fixing followed shortly after in June 2009.
The new contracts will be denominated in euro and will be physically settled with the delivery of the underlying Xetra-Gold ETC. Additionally, in a separate transaction between the holder of the ETC and Deutsche Börse Commodities, he has the right to request delivery of physical gold. Expiration dates of the derivatives will be on the third Friday of the next three calendar months as well as in March, June, September and December.
In the second quarter of 2010, Xetra-Gold achieved record inflows of 9.6 tons of gold. Electronic trading volume also totaled 757.3 million euro, an increase of 55 percent over the first quarter of 2010. Xetra-Gold is the most traded ETC available on Xetra, representing a 37 percent share of order book volume in the ETC segment.
The international derivatives exchange Eurex, jointly operated by Deutsche Börse AG and SIX Swiss Exchange, organizes markets globally. Eurex is home to the Euro zone interest rate and equity index benchmark derivatives.
Eurex’s portfolio of markets includes International Securities Exchange, a leading U.S. options exchange. The ECNs Eurex Repo and Eurex Bonds round out Eurex’s offering for repo and bond trading. In addition, Eurex provides an automated and integrated clearing house, Eurex Clearing AG. Eurex’s global liquidity network comprises around 420 direct exchange members in 26 countries worldwide.
The Xetra-Gold bearer bond (ISIN: DE000A0S9GB0) combines the advantages of physical gold with the transparency and low costs of exchange-trading of securities. There is no ongoing management fee. Each bearer bond represents the option of delivery of one gram of gold and can be bought or sold continuously via the Xetra trading platform. Clearstream Banking Frankfurt (CBF), a Deutsche Börse subsidiary, stores the gold in its vault. The physical gold is supplied, monitored and processed by industry partner Umicore AG & Co. KG. The safe custody of the gold reserves at Clearstream meets high security standards and saves investors the costs of transporting and physically storing the gold.
Private investors can obtain the underlying gold in physical form from their bank if desired. The physically backed debt instrument Xetra-Gold was admitted for trading in December 2007 and has since become the commodity with the highest turnover of all ETCs listed on Deutsche Börse. The product meets the provisions of the European UCITS directive.
About Deutsche Börse Commodities GmbH
The issuer, Deutsche Börse Commodities GmbH, based in Frankfurt, 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 partners bundle their stock exchange, financial market, settlement, custody and logistics expertise and provide an efficient and transparent market in the financial centre of Frankfurt for gold trading in Europe. With just one product, Deutsche Börse Commodities GmbH is the second largest issuer of ETCs/commodity certificates traded on stock exchanges in Germany.
Xetra® and Xetra-Gold® are registered trademarks of Deutsche Börse AG.
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