Allocated gold is a form of gold ownership where an investor has direct title to specific physical bullion that is stored on their behalf in a secure vault. Unlike general claims on a pool of metal, allocated holdings are segregated, meaning particular bars or coins are set aside exclusively for the owner.
How allocated gold ownership works
In an allocated structure, the vault or custodian records the owner’s interest in identifiable pieces of bullion, often including bar details such as weight, purity, and serial number. Because the metal is separated from other customers’ holdings, allocated gold is generally treated as the investor’s property rather than the custodian’s asset. This distinction is important in custody and insolvency scenarios, since properly allocated bullion is intended to remain the customer’s metal, not part of a shared balance sheet.
In traditional markets, allocated gold is common in professional vaulting services and bullion accounts that provide custody reports. Some providers also offer an allocated “pool” arrangement, where the metal remains allocated and physical, but is managed in a way that supports easier trading and transfers without requiring the owner to handle individual delivery logistics.
Allocated gold in crypto and tokenization
In crypto, “allocated gold” often appears in the context of gold-backed tokens. The concept is used to indicate that the token’s backing is specific, vaulted bullion rather than an unsegregated claim. For example, certain token issuers describe their backing as allocated gold held in an LBMA-approved vault, with bars identifiable by unique serial numbers and subject to custody controls.
Understanding allocated gold helps users evaluate the strength of gold-backed products, the credibility of reserves, and the risks tied to custody and redemption. It matters in the crypto ecosystem because tokenized real-world assets rely on clear, enforceable ownership and transparent backing to build trust.