Gold certificates & unallocated accounts

Understanding ‘paper gold’

Other traditional ways to buy gold include gold certificates and unallocated accounts. This is equivalent to holding a claim or promise to gold, where your gold investment is dependent on the provider. This method of gold investing, although linked to the price of gold, has some limitations because:

  • You own a financial promise not physical gold bars
  • It is difficult to establish counterparties
  • Storage fees often charged on paper gold
  • You have less security and control

Are gold certificates the best way to buy gold?

Gold certificates and unallocated gold have been popular in the past, but as investors become wiser about how they buy gold  they increasingly choose to buy gold bullion at the live gold price. With concerns over lack of direct ownership and counterparties, the popularity of gold certificates and unallocated accounts has waned as greater numbers opt for physical gold investment.

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