Is Bitcoin The Answer To Deutsche Bank’s Physical Gold Delivery Failure?

Gold bugs have warned about it for years. One of the big Wall Street bullion banks would default on physical gold delivery. Well, this happened, and the gold bugs responded just as you might expect them to do so: with panic. But, is it justified?

Yesterday, reports surfaced on a German website that a client of Xetra-Gold Exchange-Traded Commodity was told Deutsche Bank would not deliver requested gold. This contradicted representatives of Xetra-Gold’s company warranty, which said customers were entitled to delivery of the certified amount of physical gold at any time. The company added:  ”since the introduction of Xetra-Gold in 2007, investors have exercised this right 900 times, with a total of 4.5 tons of gold delivered.”

“Anyone who wants to easily convert their Xetra-Gold holdings into physical gold – at least for clients of Deutsche Bank – can do so only by selling their shares, and then buying gold coins or bars directly elsewhere,” the German article read. ” Which leads the author to the logical question: what is the worth of the Xetra-Gold service, which certifies the right to redeem physical gold, if said delivery is no longer possible? In other words, what was supposedly an ETC which promised physical delivery upon demand, is nothing more than yet another ‘paper only’ play.”

Our report has stirred a significant response, both at Deutsche Bank, and at Xetra-Gold, which today filed an official response, one which can be read in German on the following page.

ZeroHedge, a popular financial website curated by an unknown person(s), said that, during an investigation, “Xetra took a very circular approach to responding, one which in effect confirmed our concerns, that the issue was not so much with Xetra, but with the sponsor bank, in this case Deutsche Bank.”

The website went further, critiquing how the request for gold delivery took place at a bank branch: “And, as we learned last night, it does appear that if the delivery is requested at a Deutsche Bank branch, the answer is no.”

the ability of any and every other bank in Germany to deliver gold is now likewise questionable. Which begs the question: where is all the physical gold?

While ZeroHedge goes onto muse about how gold delivery at Deutsche Bank is already compromised, Reggie Middleton, popular financial blogger, differs: “Chances are that these gold “investors” got hoodwinked, bamboozled, led astray! Let this be a true lesson in counterpaty risk for anyone who will bother to read!”

Is this story evidence for Bitcoin as a secure alternative to gold? No, not necesarilly. Physical gold is still an option here, and one that’s much better than holding paper certificates if you’re looking to expose yourself to gold for safehaven purposes. That’s why this site was built out: to help consumers like you.