Understanding the benefits of Allocated, Pool Allocated and Unallocated precious metals storage

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Published : March 13th, 2017
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Category : Market Analysis

Update - this is a modified version of an article first published by The Perth Mint before the reintroduction of Unallocated silver.

A global leader in precious metals, The Perth Mint offers the highest quality gold, silver and platinum products for investors.

A popular way of acquiring these precious metals is through our depository service which enables investors to easily buy bullion and have it safely stored in the Mint's high-security vaults in Australia, all covered by a guarantee from the Government of Western Australia.

Depository accounts include the established Depository Program (PMDP), and the increasingly popular Depository Online (PMDO), a secure online trading platform particularly suitable for investors who want to be able to react quickly 24 hours a day to the dynamic precious metals markets.

Bullion purchased through either of these account types can be stored in a choice of Allocated, Pool Allocated or Unallocated format. Each type has specific benefits, which are important to understand before proceeding with your first order.

Allocated

Applicable to gold and silver, Allocated means you purchase our physical bullion products which we segregate in our high-security vaulting facilities under your name.

As the outright owner of an Allocated holding, you pay for the precious metal and also fabrication costs for making it into the finished product of your choice. Currently, we offer PMDO clients the option of seven gold bars ranging from 1oz to 400oz, as well as 1 kilo, 100oz and 1,000oz silver bars.

 

As the custodian of Allocated metal, we charge a fee for keeping it safe and secure in our vault. However, the advantage of this type of storage is your metal is readily available for inspection, pick-up or delivery - an important consideration for some clients.

Pool Allocated

For Pool Allocated storage (silver only) we set aside numbered 1,000oz silver bars into a segregated pool which backs the amount of silver we owe to customers choosing this option.

Clients each own a share of this pool of bars, rather than specific bars as with Allocated. (A list of numbered bars providing physical backing for Pool Allocated is available here.)

One of the chief benefits of pooling silver bars is that customers pay reduced fabrication and storage fees. If required, however, they may pay the balance of the fabrication charge to convert their holdings into finished bullion products for collection or for storage at the Mint as Allocated.

Unallocated

Available for gold, silver and platinum, Unallocated is the most popular option among our depository clients because there are no ongoing storage fees. Unfortunately, the unique way in which we operate this option is sometimes misunderstood.

You can think of Unallocated metal as the Mint’s working inventory. Clients choosing the Unallocated option are therefore buying into the pool of working metal which we use to facilitate our day-to-day operations.

The ounces held in each client’s account are completely unaffected if we use the actual metal backing Unallocated. That’s because the metal is used on a ‘fungible’ basis – meaning it is immediately replaced in the inventory by exactly the same amount as we take out. Accordingly, every Unallocated ounce is 100% backed by physical metal.

This arrangement provides benefits to both parties. The huge upside for clients is that there are no storage or fabrication fees. Another benefit is that you can sell as many ounces as you require, rather than a whole bar as with Allocated.

Once again, you can convert your Unallocated holding to Allocated products for collection or segregated storage in our vaults whenever you require.

Trusted worldwide

The Perth Mint has operated its depository service since the 1990s. We now manage more than $3 billion worth of investors’ metal on behalf of around 30,000 clients from over 100 countries.

We are subject to rigorous corporate governance and control, including an annual audit of our operations which is undertaken by a major accounting firm on behalf of the State Auditor General (see Annual Reports).

In terms of reassurances, however, nothing provides greater peace of mind to our clients than the fact that we operate the only government guaranteed precious metal storage program in the world. So when it comes to keeping your precious metal assets safe and secure, there is no better choice of services than those offered by the world-renowned Perth Mint.

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Data and Statistics for these countries : Australia | Georgia | All
Gold and Silver Prices for these countries : Australia | Georgia | All
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