Allocated Gold
Definition and Core Meaning
Allocated gold refers to physical bullion specifically assigned to an individual owner and held under their name within a secure vault. Each bar or coin in an allocated account is uniquely identifiable by serial number, weight, and fineness. Unlike unallocated holdings, it represents direct legal ownership of the metal rather than a financial claim against the custodian or dealer.
This structure ensures that the gold remains off the custodian’s balance sheet and cannot be lent, pledged, or re-hypothecated. The client retains absolute title and can request delivery or audit confirmation at any time.
Operational Context
In institutional custody environments, allocated gold forms the backbone of settlement and reporting. Within Golden Ark Reserve, it represents the primary storage model for clients exceeding 1 kg positions and all institutional allocations.
Each client’s bars are segregated under individual barlists, verified through third-party inspection and stored within LBMA-accredited vaults in Dubai and Hong Kong.
All movements — allocation, re-allocation, or delivery — are logged in the custody ledger and reflected in audit trails. This ensures traceability from refinery to vault (the “chain of integrity”) and aligns with global due-diligence requirements under FATF and OECD guidelines.
Industry Standards & Compliance
Allocated gold custody is governed by international best practice frameworks, including:
- LBMA Good Delivery Rules — defining bar format, purity, and refiners;
- OECD Due Diligence Guidance — ensuring conflict-free sourcing;
- FATF AML/KYC Standards — verifying client identity and transaction transparency;
- All-Risk Insurance — coverage for physical loss, theft, or damage during vault storage and logistics.
Independent audit partners (SGS, Alex Stewart, or equivalent) perform reconciliation between the vault’s inventory and the official client barlists. Reports are issued on a quarterly or semi-annual basis depending on jurisdiction.
Practical Implications
For the client, an allocated position represents full ownership and legal separation from the custodian’s assets. It guarantees that the same numbered bars listed in custody reports are the ones held in storage and insured under the client’s name.
This framework minimizes counterparty risk, simplifies audit verification, and provides a clear basis for physical redemption or inter-vault transfer without conversion to financial exposure.