Why is allocated gold and silver storage important?

It’s important that investors ensure any gold or silver investment is held in allocated storage. Otherwise, the investor finds themselves exposed to significant counterparty risk.

Check out the latest blog by Kinesis here.

What’s the difference?

Fully allocated gold or silver bullion is purchased and owned by the investor, stored in their name in a bank or third party vault. Unallocated gold or silver, on the other hand, is only credited to the investor, with the bank or dealer remaining the owner of the gold or silver.

Unallocated gold

At a glance, unallocated gold or silver may seem like an attractive proposition to an inexperienced investor, as the bank provides low-cost, convenient storage.

However, unallocated precious metals come with considerable counterparty risk, as the bank includes the unallocated gold within its liquid reserve. In the event of a bank failure or liquidity crisis, the bank can sell your unallocated gold or silver to pay their debts.

Allocated gold

Allocated gold and silver bullion, however, is legally owned by the investor. If the bank or provider goes bust, the investor is guaranteed they will be able to access the gold they own.

Traditionally, one of the major drawbacks of allocated gold and silver was the expensive storage costs, compared to unallocated precious metals where the storage is normally free.

Kinesis fully allocated gold and silver storage

In an industry first, the Kinesis monetary system has eliminated storage fees from allocated physical gold bullion and silver bullion storage.

A share of transaction fees charged across the Kinesis network, and the Kinesis bullion vaulting network spanning eight countries, combine to cover all storage costs.

Have a look at the results of our recent audit here.

In the past, investors accepted the risk of unallocated gold and silver investment, largely due to the lack of storage fees.

For the first time in economic history, Kinesis offers allocated physical gold bullion and silver bullion investment with no storage costs whatsoever.

A low-cost physical gold and silver bullion storage solution, with accessibility and value, never before seen in allocated physical gold and silver bullion storage.