Allocated Gold
Also: Allocated bullion, Segregated gold storage
Allocated gold is physical gold individually assigned to an owner, held separately, and kept off the custodian's balance sheet.
Allocated gold is the safest way to hold physical gold through a custodian. Each bar or coin is assigned by name to its owner, complete with serial number, weight, and fineness — and the custodian has no right of disposal over it whatsoever. You can draw on the current gold price at any time as a basis for valuation.
Allocated vs. unallocated - the decisive difference
The opposite concept is unallocated gold: here the buyer merely holds a claim against the bank or dealer, with no specific bars reserved for them. An unallocated account appears on the bank's balance sheet as a liability — in an insolvency, the investor ranks among the general creditors.
| Feature | Allocated | Unallocated |
|---|---|---|
| Ownership right | Direct ownership of goods | Contractual claim |
| Insolvency protection | Yes - right of separation | No - general creditor |
| Storage fees | Yes (typically 0.1-0.5% p.a.) | Often none (bank bears cost) |
| Liquidity | Slightly lower | Very high |
| Typical providers | Central banks, major banks, bonded warehouses | Commercial banks, gold savings accounts |
Legal and regulatory basis
With allocated gold, the investor acquires co-ownership or sole ownership of individual gold holdings. In an insolvency of the custodian, the owner enjoys a right of separation — the gold does not form part of the insolvency estate, because it remains the client's property rather than the custodian's. Precise arrangements vary by jurisdiction, so the custody agreement and the applicable law should be checked.
Central banks store their gold reserves exclusively on an allocated basis. Many keep part of their holdings domestically while placing the rest with recognised custodians such as the Federal Reserve Bank of New York or the Bank of England in London.
Typical forms of custody
- Vault at a precious-metals dealer or refinery — often with a certificate for each bar.
- Bank deposit (allocated metal account) — rarer than the unallocated variant, usually offered from larger amounts.
- Bonded warehouse — advantageous for international storage (e.g. Switzerland, Singapore); VAT applies only on import.
- Home vault / self-storage — no counterparty risk, but insurance and theft risk instead.
Costs and valuation
The annual storage fee ranges, depending on provider and volume, from 0.1% to 0.5% of the gold's value. An insurance premium often applies on top. To value your holding on an ongoing basis, use the gold calculator, which combines weight and the current spot price.
Holding value = fine weight (oz) x current gold price (EUR/oz)
Note: tax aspects differ from case to case. In Ireland, a gain on the disposal of bullion is liable to Capital Gains Tax at 33% after the annual personal exemption of EUR 1,270, with no holding-period relief. This is not tax or investment advice.
Allocated gold in a portfolio context
As a safe-haven asset, allocated gold offers maximum protection against counterparty risk. It is especially suited to long-term wealth preservation and inflation protection. Anyone wishing to buy regularly can model the cost-average effect with the savings plan calculator.
In brief
Allocated gold stands for complete, insolvency-protected ownership of physically present holdings — it is the counterpart to paper gold and unallocated positions, and is regarded as the safest form of professionally vaulted gold ownership outside one's own four walls.