Deutsche Bank Tries To Explain Failure To Deliver Physical Gold

The debacle involving Deutsche Bank’s failure to deliver physical gold from the Xetra-Gold exchange traded commodity (ETC) continued on Friday after a press release from Deutsche Bank. Zero Hedge covered the “non-response” from the beleaguered German bank over the weekend:

And so another non-response, because in the same press release Deutsche Bank both admits that it has an obligation to deliver the gold “as a matter of course”, and then tacitly confirms that it failed to do so, by first saying that it evaluates the “economic efficiency of physical delivery”, something it should have no right to do since the Xetra prospectus explicitly mandates that it should release gold on demand, and then adds that “should an investor’s request for the handover of physical gold not have been complied with immediately in individual cases, this will be reviewed and an individual solution will be found with the client.”

As we already know, this handover of physical gold failed on at least one occasion, and while we are comforted that Deutche Bank is reviewing the situation and a “solution will be found with the client”, it certainly does not even remotely explain why the situation should have arisen in the first place.

However, what is most notable is how quickly every entity involved in this failure to deliver, from Xetra-Gold, to Deutsche Börse, and ultimately to Deutsche Bank, responded with an attempt to placate public concerns about the availability of physical gold with statements that may have, paradoxically, only raised concerns whether the gold is in fact still there.

It remains to be seen if this one individual case spills over, and leads to more gold redemption requests, first at Xetra-Gold as well as at other similar “gold-backed” ETFs. We will promptly report any notable development in this fascinating escalation of a topic that has been near and dear to many gold bugs’ hearts for years.

As we wrote on Friday and emphasise again – paper is paper, digits are digits and gold is gold. Gold is not a safe haven unless the buyer owns actual physical gold in the safest way possible.

Why take chances with your safe haven asset and money? Test your gold investment vehicle or provider today and see can you take delivery of at least some of your allocation to gold.

If you can’t take delivery of physical gold, you don’t own gold. If you cannot hold your gold, you don’t own your gold. Possession remains 9/10s of the law. This will especially be the case in the coming global financial and monetary crisis.

Gold and Silver Bullion – News and Commentary

Gold steady in wake of disappointing jobs data (Reuters)

Gold Jumps as U.S. Jobs Disappointment Dims Tightening Prospects (24hGold)

Traders trim bets on Fed rate hike as U.S. job gains slow (Reuters)

Draghi Nears His QE3 as ECB Seen Relying on More Stimulus (Bloomberg)

North Korea fires three ballistic missiles as G20 leaders meet in China (Reuters)

Deutsche Bank Tries To Explain Why It Did Not Deliver Physical Gold, Fails (ZeroHedge)

RBS becomes the first UK bank to set negative interest rates (DailyMail)

EU is a thing of the past – our future is with an Atlantic Ireland (Independent)

Kuroda Says New Ideas Not Off Table as BOJ Reviews Policy (Bloomberg)

Italian Referendum Could Result In The Death Of The Euro (ZeroHedge)

Gold Prices (LBMA AM)

05Sep: USD 1,328.30, GBP 9,996.23 & EUR 1,189.49 per ounce
02Sep: USD 1,311.50, GBP 1,987.95 & EUR 1,172.74 per ounce
01Sep: USD 1,305.70, GBP 1,985.80 & EUR 1,172.13 per ounce
31Aug: USD 1,314.45, GBP 1,000.30 & EUR 1,179.19 per ounce
30Aug: USD 1,318.85, GBP 1,008.39 & EUR 1,180.90 per ounce
26Aug: USD 1,324.90, GBP 1,002.95 & EUR 1,173.33 per ounce
25Aug: USD 1,324.50, GBP 1,001.06 & EUR 1,172.98 per ounce

Silver Prices (LBMA)

05Sep: USD 19.46, GBP 14.60 & EUR 17.43 per ounce
02Sep: USD 18.75, GBP 14.15 & EUR 16.76 per ounce
01Sep: USD 18.65, GBP 14.08 & EUR 16.73 per ounce
31Aug: USD 18.74, GBP 14.27 & EUR 16.82 per ounce
30Aug: USD 18.78, GBP 14.35 & EUR 16.82 per ounce
26Aug: USD 18.67, GBP 14.15 & EUR 16.54 per ounce
25Aug: USD 18.50, GBP 14.02 & EUR 16.39 per ounce


Recent Market Updates

– Physical Gold Delivery Failure By German Banks
– Avoid Paper Gold – “Gold Delivery” Refused By Gold Exchange Traded Commodity
– Debt Bubble in Ireland and Globally Sees Wealthy Diversify Into Gold
– “Why Case Against Gold Is Wrong” – James Rickards
– Obama To Leave $20 Trillion Debt Crisis For Clinton Or Trump
– Gold Bullion Averages Biggest Seasonal Gains in September Over Past 20 Years
– Gold Futures See Massive $1.5 Billion “Non Profit” Liquidation In “One Minute”
– Jim Grant Is “Very Bullish On Gold”
– Germans Warned To ‘Stockpile’ Cash In Case Of ‘War’
– Ireland’s Biggest Bank Charging Depositors – Negative Interest Rate Madness
– Rothchilds Buying Gold On “Greatest Experiment” With Money In “History of the World”
– Gold – “Mother of All Bull Markets Has Only Just Begun” – Grandich
– 45th Anniversary Of Nixon Ending The Gold Standard

Mark O'Byrne

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