Allocated vs. Pooled Gold: The Key Differences

At first glance, different ways of buying gold can look alike, but the differences can become painfully clear when things go wrong. It all comes down to ownership: do you own metal, or do you hold a claim against an institution? That distinction is known as allocated versus pooled gold. Below, you’ll learn what each involves, how they differ, and which choice GoldRepublic makes.

What is allocated gold?

Allocated gold consists of specific, identifiable gold bars or coins that you legally own. Each has a weight, a fineness, and usually a serial number. It is held in your name, segregated from the custodian’s own assets and from those of other clients.

The custodian of allocated gold is merely the “holder,” not the owner. As a result, the investment gold does not appear as an asset on the custodian’s balance sheet. In the event of bankruptcy, that makes all the difference. Because the gold is not the custodian’s property, it does not become part of the bankruptcy estate, and creditors have no claim to it. You remain the owner of your gold and can claim it at any time.

What is unallocated (pooled) gold?

With unallocated (pooled) gold, no bar is assigned to you. Instead, there is a shared stock from which you are entitled to a certain quantity. Legally, this is the crucial difference: you are a creditor of the party you buy the gold from.

As long as all goes well, you’ll notice little of this difference. But as soon as the issuer goes bankrupt, your claim becomes part of the bankruptcy estate and you are treated as one of (many) creditors. Whether you get your gold back depends on what is left in the estate. On top of that, pooled gold is not always 100% backed by physical metal.

There are some advantages, however. You often pay lower or no storage fees, you can buy gold in small fractions, and it can usually be traded quickly. These features may appeal to those who want to respond quickly to movements in the gold price.

The differences between allocated and unallocated gold

Allocated and unallocated gold differ in several important ways, which makes each suited to different types of investments and risk profiles. The table below lays out the differences.

Why GoldRepublic chooses allocated gold

GoldRepublic works exclusively with allocated gold. That is a deliberate choice: when you buy gold through us, you become the direct and full owner of physical precious metal. At our storage locations, your gold is held in your name, segregated from our own assets.

The gold is kept in secure, insured vaults outside the banking system. We deliberately use external parties rather than our own vaults, so trading and storage remain separate. When you buy gold, you choose the location yourself. You can even spread your holdings across multiple vaults and jurisdictions. Transportation is entrusted to specialized carriers such as Brink’s, Loomis, and Helveticor.

At GoldRepublic, storage fees for gold are 0.5% per year (excluding VAT), including insurance, calculated monthly based on market value.

Once stored, the presence and fineness of the gold are periodically verified by independent inspector Alex Stewart International. Inventory lists are updated daily.

Owning physical gold doesn’t mean you’re tied to us. Your gold can be traded at any time at the current price. You can also have it delivered to your home.

In what weights can you buy allocated gold?

Allocated gold is available in various weights. At GoldRepublic, you can buy allocated gold starting at just 1 gram. You can also save in gold starting at 1 gram (or €50). All bars come from LBMA-accredited refiners such as Umicore, Valcambi, Argor-Heraeus, and Agosi, with a purity of 999.9.

For purchases under 100 grams, you are a part-owner. This still makes you the legal owner of allocated gold, in the form of co-ownership.

Want to know what other forms of gold ownership there are? Read our article on ways to invest in gold, or see right away how to buy physical gold with GoldRepublic.