Allocated vs Unallocated Gold: The Difference That Decides If You Actually Own It
It's the single most important distinction in vaulted gold, and the one most sales pages blur: allocated gold is specific bars owned in your name; unallocated gold is a claim on a shared pool. One survives the provider going bust. The other doesn't. Here's the honest breakdown for a normal investor. Not financial advice.
The short answer
Allocated gold means specific, identifiable bars or coins are held in your name, segregated from the provider's own assets — you are the legal owner, so if the operator goes bankrupt, your metal is not part of their estate. Unallocated gold means you hold a claim against a pool of metal the provider owns; it's cheaper and more liquid, but you are an unsecured creditor, not an owner. If cost is all you look at, you'll pick unallocated. If ownership is what you actually want from gold, you pick allocated.
Allocated gold — you own the bar
With allocated storage, the vault records specific bars against your account — refiner, serial number, weight and fineness — and keeps them segregated. That metal cannot be lent out, rehypothecated or used to settle the operator's debts. This is the model that makes gold a genuine store of value independent of any company's solvency: the whole point of holding gold outside the banking system is undone if your holding is really just an IOU. The cost is a small annual storage fee (typically ~0.12–0.22%, insured). LBMA-network vaults in London, Zurich, New York, Toronto and Singapore hold allocated gold this way.
Unallocated gold — you own a promise
Unallocated gold is a balance, not a bar. The provider owes you a quantity of gold from its general stock; you don't own any specific metal, and you rank as a creditor if it fails. It's popular because it's cheaper (often little or no storage fee) and instantly tradable, and for short-term trading exposure that can be fine. But it reintroduces exactly the counterparty risk that gold is supposed to remove. The honest rule: unallocated for trading convenience with money you could afford to have exposed; allocated for wealth you want to actually own.
Counterparty risk — the word the brochures avoid
Counterparty risk is the risk that the institution on the other side of your holding fails to deliver — because it's insolvent, frozen, or fraudulent. Cash in a bank, unallocated gold and 'gold' that's really a contract all carry it. Allocated gold, self-custodied coins, and gold you hold physically do not, because there is no counterparty between you and the metal. This is the same principle as 'not your keys, not your coins' in crypto: not your bar, not your gold.
| Factor | Allocated | Unallocated |
|---|---|---|
| What you own | Specific bars in your name | A claim on a pool |
| If the provider fails | Your metal is yours — segregated | You're an unsecured creditor |
| Cost | Small annual storage fee, insured | Cheaper / often no storage fee |
| Best for | Owning wealth long term | Short-term trading exposure |
| Counterparty risk | Removed | Present |
What this means for you
If you're buying gold as insurance against exactly the kind of event where institutions fail, unallocated defeats the purpose — you've bought a claim that's only as good as the company holding it. Pay the small storage fee for allocated, or take physical delivery. If you only want a cheap, liquid way to track the gold price for a while, unallocated or a physical-backed product can do that — just know what you hold. Compare providers on our ranking, and price the all-in cost first. This is education, not financial advice.
Want gold that's actually in your name?
Allocated storage is the whole point of this guide: specific bars recorded to you, segregated from the operator's own assets. Compare providers on our public score first, or look at how one of them documents ownership and vaulting.
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