THE SHORT ANSWER
Specific-bar custody and a general metal entitlement are different risks
Allocated gold is linked to identified bars held for the client under the account agreement. Unallocated gold is a fungible metal entitlement without specific bars set aside, creating credit exposure to the provider in the LBMA framework. The product name is not enough: read title, bar-list, substitution, insurance, fee and withdrawal clauses together.
SIDE-BY-SIDE
Compare evidence, not marketing labels
BAR LIST TEST
“Allocated” should lead to identifiable holdings
In LBMA's description, the client sees a weight list containing unique bar numbers, gross weight, assay or fineness and fine gold. Ask how often the list is produced, whether bars can be substituted, who is named as owner, whether the custodian acknowledges the client and how statements reconcile to vault records.
INSOLVENCY AND INSURANCE
Do not treat physical location as a complete legal opinion
Allocated structure can reduce credit exposure in the described market model, but enforceability depends on the agreement, jurisdiction, custody chain and facts. LBMA also notes that allocated owners arrange their own insurance unless the institution expressly agrees otherwise. Ask who is insured, for what perils, at what valuation and with what exclusions.
DECISION REVERSAL
Unallocated can be operationally useful; allocated can be operationally restrictive
Unallocated accounts are widely used for convenient wholesale settlement. An allocated account may suit an owner prioritizing specific-bar title, yet storage cost, bar-size mismatch and withdrawal logistics can be significant. The right choice changes with time horizon, transaction frequency, desired bar size and need for physical access.
PRIMARY SOURCES
Regulator and market-standard evidence
- Joint FINRA/CFTC physical-metals bulletin for dealer, spread, fees, storage and statement checks.
- CFTC precious-metals fraud advisory for missing metal, undisclosed storage, financing and delivery warning signs.
- NFA guidance on checking BASIC records for the important difference between an ID number, membership and approved status.
- LBMA precious-metal account guide for allocated account bar lists, unallocated entitlement and insurance boundaries.
- LBMA vaulting overview for the Loco London custodian role and the fact that LBMA does not accredit new vaults.
- CME precious-metals delivery process for warrant, eligible metal and load-out choices in that exchange framework.
Reviewed July 31, 2026. Registration, custody terms, fees, insurance and withdrawal procedures are time-sensitive; verify the current contract and official record.
FAQ
Allocated and unallocated gold questions
What is allocated gold?
In the LBMA account framework, allocated metal is associated with specific bars and a detailed list including identifiers, gross weights, assays and fine weights. Contract terms still control the exact legal relationship.
What is unallocated gold?
LBMA describes it as a general entitlement to an amount of fungible metal without specific bars set aside. The holder is exposed to the account provider as an unsecured creditor in that framework.
Is allocated gold always insured by the custodian?
No. LBMA says the owner of allocated metal is responsible for arranging insurance unless the agreement expressly provides otherwise.
Can I withdraw allocated gold immediately?
Not necessarily. High-security access, minimums, notice, documentation, charges, substitution clauses and logistics can make physical withdrawal more complicated than ownership language suggests.