GOLD USD 4,142.01 / oz • Δ USD +43.82 +1.07% GOLD USD 133,168.71 / kg • Δ USD +1,408.85 +1.07% 1W -1.98% 1M +9.33% 1Y +50.56%

Gold Custody

Gold custody is the legal and operational framework through which physical bullion is held on behalf of its owner by a regulated custodian. The arrangement is governed by a formal custody agreement that defines title, access rights, insurance coverage, and audit procedures.
Unlike deposit or trading accounts, custody does not transfer ownership to the institution — the client retains full and continuous legal title to the stored gold.

In a custody arrangement, gold is stored in secure vaults operated by the custodian or its appointed sub-custodians. Each position is documented through barlists, inventory records, and periodic audit reports.
The core purpose of custody is to preserve the asset’s integrity — ensuring that every bar or coin remains traceable, verifiable, and fully insured throughout its storage period.

Custody differs from deposit or collateral arrangements because it does not involve any right of use or rehypothecation. The custodian acts solely as a bailee — a party responsible for the safekeeping of an asset without assuming ownership.
Legal frameworks for custody are typically derived from property and trust law, reinforced by contractual terms that specify liability, insurance scope, and inspection rights.

Operational Standards

Institutional gold custody is conducted within vaults accredited by the London Bullion Market Association (LBMA) or equivalent international authorities.
Operational standards include:

  • Segregated storage and precise bar identification;
  • Dual-control access and continuous surveillance;
  • All-risk insurance coverage;
  • Independent inventory reconciliation;
  • Compliance with AML/KYC obligations under FATF and OECD guidelines.

These controls ensure that the gold remains outside the custodian’s balance sheet and is excluded from its operational liabilities.

Custody Agreement Components

A standard custody agreement defines:

  • Scope of custody — physical storage, movement, and reporting;
  • Client rights — inspection, withdrawal, or transfer upon written instruction;
  • Custodian duties — maintenance of records, audits, and insurance;
  • Jurisdiction and governing law — typically aligned with the location of the vault.

Periodic statements and audit certificates confirm that holdings match the records of both the client and the vault operator.

Institutional Role

Gold custody serves as the infrastructure layer of the institutional bullion market. It enables ownership continuity, settlement finality, and transparency for physical assets traded or held as reserves.
Central banks, asset managers, and high-net-worth investors rely on custody services to maintain verified ownership while outsourcing physical security and operational oversight.

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