“Allocated gold” refers to a specific way of owning and holding physical gold. It represents a form of ownership where an individual or entity has a direct claim to a specific quantity of physical gold held in a secure storage facility, typically in a bank or a specialized precious metals vault.
Ownership and Accountability
Allocated gold means that the owner has a legally recognized and segregated interest in a specific amount of physical gold. This gold is not shared with other customers or mixed with the assets of the storage provider. The owner retains full ownership and legal title to the gold.
Segregation
In the allocated gold system, each piece of gold is identified and allocated to a specific owner. This is usually done by assigning a unique serial number or other distinguishing mark to each gold bar, coin, or other form of gold. The owner can verify the existence and authenticity of their allocated gold through these specific markings.
Transparency and Verification
Owners of allocated gold have the right to audit, inspect, or verify their holdings at the storage facility. This transparency ensures that the gold they own matches the records and that there is no double-counting or substitution of gold.
Storage Facilities
Allocated gold is typically stored in secure and accredited facilities, such as bank vaults or independent precious metals depositories. These facilities are equipped with advanced security measures, like surveillance cameras, armed guards, and access controls, to protect the stored gold.
Custodial Services
Many owners of allocated gold use the services of a custodian or storage provider to manage their holdings. The custodian is responsible for storing, safeguarding, and maintaining the records of the allocated gold. Owners pay fees for these services, which may include storage, insurance, and audit-related costs.
Legal Protections
Allocated gold is generally protected by the legal and regulatory framework of the jurisdiction in which it is stored. This means that if the storage provider faces financial difficulties or insolvency, the gold remains the property of the owner and is not considered an asset of the storage provider’s estate.
Transferability
Allocated gold is transferable, allowing owners to buy, sell, or transfer their ownership to other parties. This makes it a more liquid form of owning physical gold compared to keeping gold at home or in an unallocated account.
Insurance
Allocated gold is often insured to protect against theft, damage, or other potential risks. The cost of insurance is typically covered by the owner as part of their custody agreement.
Fees
Owners of allocated gold typically incur ongoing fees for storage and custodial services. The fees may vary based on the quantity of gold held, the location of the storage facility, and the specific services provided by the custodian.
Allocated gold is a secure and transparent way to own physical gold, providing individuals and institutions with direct ownership of specific, identified gold assets held in a dedicated storage facility. This form of ownership offers peace of mind, liquidity, and protection against various risks associated with owning and storing physical gold.