Understanding Allocated vs. Unallocated Gold Storage

When you hold gold through an institution, the single most important question is whether you own specific bars or merely a claim. The industry uses two words for the two answers — allocated and unallocated — and they describe fundamentally different legal relationships, even though both may appear on a statement as 'gold holdings'.

Allocated storage means that specific, identified bars are held for you as your property. Each bar is recorded by its serial number, refinery, fineness and weight, and the custodian's records show it as belonging to you. The bars sit outside the custodian's balance sheet: if the custodian becomes insolvent, the bars are not part of its estate and cannot be used to pay its creditors. You can inspect them, withdraw them or move them at any time, and they are insured as your property.

Segregated allocation goes one step further and keeps your bars physically apart from other clients' metal — in a dedicated position, cage or compartment with its own access log. This matters for audit purposes and for very large holders, and it is the only form of storage Real Vault offers.

Unallocated storage is different in kind. You have a contractual claim against the institution for a quantity of gold; you do not own any particular bar. The gold on the institution's books backing that claim may be held in bars, may be lent out, or may exist only as a net position hedged in the derivatives market. If the institution fails, you are an unsecured creditor standing in line with everyone else. Unallocated accounts are cheaper — often free — precisely because the institution can use the metal.

There are legitimate uses for unallocated accounts, particularly for short-term trading where the ability to buy and sell fractional amounts instantly matters more than title. For long-term holding — for wealth preservation, for succession planning, for a treasury reserve — the counterparty risk is the point, and allocated storage is the only model that removes it.

Costs differ, and clients should understand why. Allocated storage carries a fee because the custodian must handle, record, insure and secure specific bars that it cannot use for any other purpose. Real Vault charges a percentage of value per year, insurance included, with no intake fee for certificated bars and no exit penalty. An unallocated account may charge nothing, but the client is, in effect, lending their gold to the institution in exchange.

Liquidity is often raised as an argument for unallocated holding, but with a well-documented allocated position the difference is small. Bars with an unbroken chain-of-custody record and refinery certificates can be sold to dealers or delivered against a sale within days, and a custodian with its own transport can move them to the buyer's vault directly. What allocated holders should avoid is metal without provenance, which is why we insist on bar-level documentation at intake.

The simplest test when reading any custody agreement is to look for the serial numbers. If your statement lists the bars you own, with their serial numbers, refiner and weight, and the agreement states that title remains with you, you have allocated storage. If it shows only a quantity in grams or ounces, you have a claim.