Book 7 | Ch:21 - The Tale of the Three Brothers

SPOILERS:

Xenophilius Lovegood explains that this symbol is the insignia of the Deathly Hallows, and that the origin of the story is detailed within “The Tale of the Three Brothers.”

Hermione recognises the story and retrieves her copy of The Tales of Beedle the Bard and then reads aloud. Afterward, Xenophilius explains the symbolism of the insignia and discusses the Deathly Hallows.

Harry, wandering around the house, notices that there is no sign of Luna having been present, then queries Xenophilius about it. Lovegood then reveals that the Death Eaters took her, and he plans to hold Harry, Ron and Hermione until they arrive so that he can trade them for his daughter.

Harry, Ron and Hermione just manage to escape, while intentionally making it clear that Xenophilius wasn’t lying to the Death Eaters, so he wouldn't be harmed. They understood that the man's actions were only in desperation for his daughter's safety.