Buying Gold ETFs: A Beginner's Guide to Precious Metals

For those in Germany who want to buy a gold ETF, they will encounter gold ETCs in practice, as the UCITS Directive prohibits single-asset index funds. Currently, 23 physically backed Exchange Traded Commodities are available. Costs range between 0.00 and 0.99 percent per year. Only ETCs with physical gold delivery claims are tax-free after a one-year holding period.

Why Gold Makes Sense as a Portfolio Addition

Gold has been one of the most reliable stores of value for centuries. Unlike paper money, precious metals cannot be arbitrarily increased because mining volumes are limited. In times of crisis, when stock markets come under pressure, gold prices often move in the opposite direction. This very characteristic makes precious metals a sensible addition to a well-diversified portfolio.

Stabilizer in Turbulent Times

During the 2008 financial crisis, the euro crisis, and recent geopolitical conflicts, the pattern emerged repeatedly: when stocks fell, gold maintained its level or appreciated. A moderate gold allocation thus reduces overall portfolio risk without significantly eroding the long-term returns of an equities portfolio.

Protection Against Paper Money Risks

Rising inflation rates and expansionary central bank policies erode the value of cash. Gold, on the other hand, retains its purchasing power across generations. This protective function is the primary reason many investors plan for a fixed gold allocation.

Gold ETF or Gold ETC: The Important Difference

Strictly speaking, there are no true gold ETFs in Germany. European UCITS rules require index funds to diversify capital across multiple components. A fund that exclusively tracks gold does not meet this requirement. Anyone wishing to buy a gold ETF will end up with a gold ETC.

What ETCs Are Legally

Gold ETCs are bearer debt securities backed by physical gold. Economically, they behave like an index fund tracking gold prices. Legally, they remain debt securities of the issuer and differ from traditional securities such as equity funds, which are protected as special assets.

Swiss Solution

True gold ETFs are permitted in Switzerland. German investors can trade these products but lose the tax advantages that apply to physically backed ETCs with delivery claims.

Gold ETC Comparison: These Products Count Among the Largest

The German market for gold ETCs is concentrated. Four providers dominate by fund volume:

• iShares Physical Gold ETC: approximately 32,486 million EUR in fund volume
• Invesco Physical Gold ETC: approximately 25,040 million EUR
• Xetra-Gold: approximately 21,340 million EUR
• Amundi Physical Gold ETC: approximately 10,522 million EUR

Low-Cost Products with Zero TER

Four providers are tied at the top on costs: boerse.de Gold ETC, EUWAX Gold, EUWAX Gold II, and Xetra-Gold each charge 0.00 percent in ongoing management fees. These products are financed through the spread between bid and ask prices.

Performance in the Current Market Environment

As of 31.05.2026, the best-performing gold ETCs showed 1-year returns of around 35 percent. Over three years, returns totaled approximately 110 to 114 percent. Top performers on a yearly basis were EUWAX Gold II with +35.46 percent, EUWAX Gold with +35.44 percent, and boerse.de Gold ETC with +35.43 percent.

Tax Treatment in Germany

The tax component often determines net returns. Here lies a central lever when making a purchase.

Tax-Free Gains Following BFH Ruling

The German Federal Tax Court ruling of 16.06.2020 makes clear: physically backed ETCs with delivery options are treated like physical gold. If you hold the ETC for longer than one year, gains can be realized completely tax-free. The exemption threshold for private capital gains has been 1,000 euros per year since 2024.

ETCs with Delivery Claims

The following products meet the requirement:

• Xetra-Gold
• EUWAX Gold and EUWAX Gold II
• EUWAX Gold Core and EUWAX Gold Traceable
• WisdomTree Core Physical Gold
• Gold Bullion Securities
• HANetf The Royal Mint Physical Gold
• boerse.de Gold ETC

Capital Gains Tax for ETCs Without Delivery Claims

ETCs without a delivery option fall under capital gains tax of 25 percent plus solidarity surcharge and possibly church tax, regardless of holding period. Anyone wishing to invest tax-efficiently in gold should check product terms in advance.

Step by Step: Acquiring Gold ETCs at the Exchange

Purchase works just like traditional ETFs through your own custody account. Three steps lead to your goal.

Step 1: Choose a Broker

Neobrokers like Trade Republic, Scalable Capital, and ING offer gold ETCs, often without order fees. Traditional direct banks also provide the most important products but often charge higher transaction costs.

Step 2: Determine the ISIN

Enter the WKN or ISIN of your desired gold ETC into the order form. Example: A0S9GB for Xetra-Gold. This helps investors avoid confusion with similarly named products.

Step 3: Set a Limit

A limit order protects against unfavorable executions, especially with larger gold price fluctuations. For highly liquid ETCs like Xetra-Gold, spreads are typically tight.

Gold Savings Plan: Invest in Precious Metals Regularly

A gold savings plan is suitable for anyone wanting to build their gold allocation gradually. Even small contributions suffice.

Provider Terms

At Scalable Capital, Trade Republic, and ING, savings rates starting from one euro are possible. Other direct banks set minimum amounts of 10, 25, or 50 euros. Many neobrokers waive execution fees entirely.

Utilize the Cost-Average Effect

Investing a fixed amount monthly means you automatically buy more shares at low prices than at high prices. Over long periods, this mechanism smooths entry prices and reduces timing risk.

Physical Gold or Gold ETC: Which Fits Better?

Both approaches have their merits. The decision depends on your personal goals.

Arguments for Gold Bars and Coins

Those wanting to hold the precious metal in their hands purchase gold bars or coins. Well-known coins include Krugerrand, Maple Leaf, and Vienna Philharmonic. Advantage: direct ownership without issuer risk. Disadvantage: markups on purchase, storage in safes or safety deposit boxes, higher bid-ask spreads.

Arguments for Gold ETCs

Those wanting to buy physical gold but prefer to skip the logistics opt for an ETC. Advantages: tight spreads on the exchange, no separate storage, tradable anytime during trading hours. A sale proceeds as straightforwardly as with securities.

Combination as Strategy

Many investors mix both forms. A smaller portion in coins or bars as a crisis reserve, the bulk as an ETC in their account for easy management. This creates flexibility and tangible assets in one investment.

Important Factors When Comparing Gold ETCs

Anyone conducting a thorough gold ETC comparison examines multiple criteria in parallel.

Fund Volume

At least 100 million EUR is advisable. Larger funds offer tighter spreads and lower risk that the issuer discontinues the product.

Replication

All common gold ETCs except the BNPP Gold ETC are physically backed. The latter operates swap-based and costs 0.99 percent TER. Physical backing is considered standard and a safety anchor.

Currency Hedging

Gold is priced in US dollars. Exchange rate movements directly affect returns for euro-based investors. Currency-hedged variants like the Xtrackers Physical Gold EUR Hedged ETC cost up to 0.59 percent per year. In periods of a strong dollar, hedging has often been disadvantageous in recent years.

Tax Status

Only ETCs with delivery claims benefit from tax exemption after one year. This point should definitely appear in the product profile.

Understanding and Assessing Risks

An investment in gold is not automatic. The following points belong on your checklist:

1. No diversification: Gold ETCs track a single commodity. Diversification comes from the rest of your portfolio.
2. Currency risk: Price movements between euro and dollar significantly influence performance.
3. Issuer risk: The bearer debt security is not special assets. Physical gold backing mitigates this risk.
4. No current income: Gold pays no interest or dividends. Returns come solely from price appreciation.
5. Fund closure: With small volumes, an ETC can be withdrawn from the market.

How Much Gold Belongs in Your Portfolio

The common rule: do not invest more than 10 percent of your assets in gold and gold securities. This recommendation aligns with Finanztip's assessment. For 50,000 euros in assets, that would be a maximum of 5,000 euros in precious metals.

Reasoning for the Upper Limit

Over the long term, gold has delivered less than half the returns of investing in globally diversified equities. Setting the allocation too high means forgoing growth potential. Bonds, stocks, and gold complement each other as asset classes.

Adjusting to Your Life Situation

Young investors with a long horizon can keep their gold allocation lower. Those approaching retirement value the stabilizing effect more highly. Personal risk tolerance determines the decision.

Market Development in Recent Years

Gold price development has been rapid recently. In 2024, precious metals rose 26.5 percent, followed by approximately 67.4 percent growth in 2025. In 2026, through end of May, a further 4.27 percent increase in euros was added.

Trend Reversal in Fund Flows

In 2023, gold ETCs in Germany saw record outflows despite multiple crises. In 2024, global outflows of approximately 244.2 tonnes continued. From mid-2024, the trend reversed; in June, physically backed funds reported the second consecutive month of inflows. In 2025 and 2026, the ETF boom drove gold demand and thus gold prices sharply upward.

Practical Tips Before Purchasing

Before placing your first investment, a clear look at the details is worthwhile.

Plan Your Holding Period

For tax exemption, the holding period must be at least one year and one day. Those wishing to speculate short-term lose this advantage and pay capital gains tax on profits.

Combine Savings Plan and Lump-Sum Investment

A mix of lump-sum investment and monthly savings plan smooths market volatility. This allows you to weather short-term gold price dips more calmly.

Rely on Credible Information Sources

Comparison portals, provider tables, product data sheets from issuers, and independent analyses provide the foundation. On aktie.com, you'll find current assessments of gold markets and precious metals investments.

Conclusion on Buying Gold ETCs

For those in Germany wanting to invest in gold, the ETC format is unavoidable. Selection is broad, costs vary widely, and tax status depends on delivery claims. With a gold allocation of around ten percent, a physically backed product, and adequate holding period, a solid addition emerges that reduces overall portfolio risk.