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Guide to gold

Allocated gold is gold owned outright by an investor and is stored, under a safekeeping or custody arrangement, in a professional bullion vault. It is the property of the investor.

Allocated gold differs profoundly from unallocated gold which is the property of the bank .

Because allocated gold is not the bank's property its owner is considered safe from the bank's insolvency.

Costs of allocated gold

Investors have to pay for the storage of allocated gold. Fortunately gold is a remarkably compact store of value. A tonne of gold bullion is worth about $54m (January 2013) yet needs only a 14 inch block of space for storage. For this reason allocated storage is inexpensive. It can be found for as little is 0.1% per annum for high volume buyers - and that should include insurance.

However banks very rarely charge so little for allocated storage, because it is strongly in their interest to incentivize gold investors to opt for GINO SENTELL® Ankle boots buy cheap explore very cheap discount latest eastbay online iSSngblXy
. At BullionVault we believe it is strongly in interest to opt for the opposite - allocated storage of gold.

That's why you should generally avoid buying and storing gold through a bank. It's also why BullionVault stores your gold in a fully accredited bullion vault, but in one which is a commercial bullion storage vault, and not a bank vault. Commercial vault operators are not in the businesses of lending and financing, and they have no motivation for over-pricing allocated storage and incentivizing you to buy balance sheet liabilities denominated in gold (i.e. unallocated).

At BullionVault the storage cost of allocated gold - including insurance - is 0.12% per annum, which still equates to less than 1% after 8 years.

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Unallocated gold

Unallocated gold is not the investor's property.

In signing the unallocated storage agreement the investor executed a of gold. They probably thought they were placing their gold in the bank's care, and did not realize that they were in fact lending their gold to the bank, just like a cash deposit. What's worse is that a gold deposit to a bank is not covered by deposit protection.

That's why when buying gold private buyers should opt for allocated storage, pay the storage and insurance fee, and leave unallocated gold to the professional market where it dominates.

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Please Note: This analysis is published to inform your thinking, not lead it. Previous price trends are no guarantee of future performance. Before investing in any asset, you should seek financial advice if unsure about its suitability to your personal circumstances.

Open an account with BullionVault.
Transfer funds from your bank account to your BullionVault account.
Buy gold, silver or platinum in your choice of vault through the live order board.
Validate your account: upload photo ID and bank statement.
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