Allocated Gold
Also: Segregated gold storage, Fully allocated gold
Allocated gold refers to physical gold that is individually assigned to an owner, stored separately and does not enter the balance sheet of the custodian.
Allocated gold is the safest way to hold physical gold through a custodian. Each bar or coin is assigned by name to its respective owner, complete with serial number, weight and fineness – the custodian has no right of disposal over it whatsoever. You can use the current gold price at any time as a basis for valuation.
Allocated vs. Unallocated – the Decisive Difference
The counter-concept is unallocated gold: here the buyer merely holds a claim against the bank or dealer, without specific bars being reserved for them. The unallocated account appears on the bank's balance sheet as a liability – in the event of insolvency the investor is part of the general body of creditors.
| Feature | Allocated | Unallocated |
|---|---|---|
| Ownership right | Direct title to goods | Contractual claim |
| Insolvency protection | Yes – right of separation | No – ordinary 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. Under Maltese law the transfer of ownership of movable property is governed by the Civil Code (Chapter 16 of the Laws of Malta). In the event of the custodian's insolvency, the owner has a right to reclaim their property, since fully allocated metal held on their behalf does not form part of the custodian's estate – provided the metal is genuinely segregated and identifiable. This right of separation is a key advantage over an unallocated claim.
Central banks store their gold reserves exclusively as allocated metal. The Central Bank of Malta, like other Eurosystem central banks, holds identifiable gold holdings, part of which are traditionally held at major international vaults such as the Bank of England in London.
Typical Storage Arrangements
- Vault at a precious metal dealer or a refinery – often with a certificate per bar.
- Bank deposit (allocated metal account) – rarer than the unallocated variant, usually from larger amounts.
- Bonded warehouse – tax-advantageous for international storage (e.g. Switzerland, Singapore); VAT only becomes due upon import.
- Home safe / self-storage – no counterparty risk, but insurance and theft risk.
Costs and Valuation
The annual storage fee ranges, depending on provider and volume, between 0.1 % and 0.5 % of the gold value. An insurance premium is often added. For the ongoing valuation of your holdings, use the gold calculator, which combines weight and the current spot price.
Holding value = Fine weight (oz) × Current gold price (EUR/oz)
Tax Treatment in Malta
Investment gold in bar or coin form is exempt from VAT in Malta under the EU investment-gold rules (Council Directive 2006/112/EC), where bars are at least 995‰ fine and coins at least 900‰. Malta levies no capital gains tax on private disposals of movable assets such as precious metals: Maltese CGT applies only to specific assets defined by law – notably immovable property, securities and business interests – not to bullion held by a private individual. There is no minimum holding period comparable to a speculation period. Note: this is not tax or investment advice; for binding information consult a qualified adviser. Sources: cfr.gov.mt, legislation.mt, eur-lex.europa.eu.
Allocated Gold in the Portfolio Context
As a safe-haven asset, allocated gold offers maximum protection against counterparty risk. It is particularly suited to long-term wealth preservation and inflation protection. Those who wish to buy regularly can simulate the cost-averaging effect using the savings plan calculator.
In Brief
Allocated gold stands for complete, insolvency-protected title to physically present holdings – it is the counterpart to paper gold and unallocated positions and is regarded as the safest form of professionally stored gold ownership outside one's own four walls.