Page 50 - Introduction to investing in Gold

The Beginner's Guide to Investing in Gold
Allocated Gold
An investor in allocated gold is the outright owner of a certain amount of physical bullion.
As it is the physical property of the investor and not part of a bank or other organisation’s gold reserves, allocated gold should not be seized in the event of a liquidity crisis (but you could still be taking a risk, particularly if you hold it in the banking system).
Allocated gold may incur higher costs than unallocated gold, such as premiums and storage costs.
Many people view allocated gold as the ultimate safe-haven asset because their investment is independent of the performance of the bank. You might want to consider holding your gold outside of the banking system, as any gold is likely to be viewed as an asset by creditors if there is a financial crisis.
Unallocated Gold
Unallocated gold remains the property of the bank – the investor is essentially a creditor of the bank. It’s a bit unclear what would happen in a crisis, but that’s probably worth checking before you buy it!
It is the most common form of gold investment worldwide.
The fact that no physical gold may be held makes this a much cheaper and more convenient method than allocated gold.
The bank may not actually own sufficient gold to back the total value of all unallocated gold investments. You should discuss this with both the bank and your financial adviser.
Again, which route you decide to take really boils down to why you want to hold the gold. Personally, I prefer allocated gold.
Medium-Term Investing (2-5 Years)
It’s difficult to define “medium-term investing”, but from a personal perspective, I’d view it as money you don’t need to access soon (let’s say, in the next two years), but you might need to use it after that. Your definition may be very different, and it’s something that you should discuss with your financial adviser.
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