Gold bar storage in non-bank vaults in London

Global hub for gold bullion logistics   Physically segregated gold bars     Fully allocated and reserved      Available for immediate delivery

Gold bar storage in non-bank vaults in London

Auric Gold provides the facility to registered customers to store the gold bars they purchase from Auric Gold, in insured third-party non-bank vaults in London, United Kingdom.

These gold bars deposited into vaults and immediately segregated, set aside and reserved exclusively for customers with a detailed inventory list specifying gold bar weights, serial numbers, purities and refiner names.

Customers can withdraw their gold bars from storage upon reasonable notice to Auric Gold.

Customers may also request to inspect all or some of their gold bar holdings in storage upon reasonable notice to Auric Gold.

Storage and insurance fees

Auric Gold offers free gold storage and insurance to qualifying customers, subject to terms.

Local or international shipment

Customers may also request local or international shipment. The requirements of each customer are unique and Auric Gold can provide requisite solutions upon request and subject to appropriate due diligence.

London – The World’s global hub for gold storage

London’s geographical position makes it uniquely placed in a time-zone which connects the major physical gold markets of the Middle East, Asia and the Far East to the largest gold futures and options exchanges in the world in the United States. Whilst London itself acts as the centre of gravity for physical settlement of global gold bullion trades which are traded on a “loco-London” basis.

The British central bank, The Bank of England, has played a unique role in creating the initial refining, melting and assaying and production of standards for gold bars that would be acceptable as “good delivery” on the London markets, a role that evolved over the years and inherited by the London Gold Market and now by the London Bullion Market Association (LBMA).

The immense flows of gold from all over the world into London also led to the Bank of England creating its own Bullion Warehouse in 1732. Over 280 years later in 2015, London hosts some of the most efficient, modern and specially designed vaults to store gold bullion bars for rapid deposits, withdrawals and international logistics and auditing.

Some bullion vaults are owned by some of the banks who comprise the London Bullion Market and the London Precious Metals Clearing Limited. Other vaults are owned by non-bank entities which specialise in the secure storage and international logistics of gold bullion, other precious metals and high value cargo and securities. Such non-bank entities also provide secure and fully insured logistics to banking institutions.

Auric Gold enables storage of its customers’ gold holdings in such non-bank gold bullion vaults which have long standing reputation and experience in the domain of precious metals storage, insurance and UK and international logistics.

“Shared” ownership of gold stocks

Shared ownership is an arrangement whereby a bullion dealer “sells” smaller portions of his own gold stocks to his customers. Such customers then receive a contract confirmation that they “own” the smaller amount of gold. This may even be exact amounts such as 1 ounce, 50 grams or 100 gram or 1 kilo. However, such gold amounts do not relate to, or attributed to, a definitive gold bar with a certain serial number. It merely represents the right of the customer to demand the bullion dealer to provide physical delivery of a certain weight in gold out of the larger stock of gold.

Auric Gold does not sell such entitlements to portions of a gold bar or portions a larger gold stock where specific title or specific ownership is unsubstantiated. Gold said to be in “shared” ownership with more than one customer means that a customer has no legal ownership of specifically identifiable goods.

If one of the multiple customers wished to take physical delivery, the bullion dealer would have to “break” up a gold bar or a gold stock. This would be a costly and impracticable exercise. It is not possible to predict how many customers may demand physical delivery at any time and in what weights and how urgently such deliveries are required.

In the event of a run on gold deposits the bullion dealer will be faced with an insurmountable task of liquidating its existing stocks assuming that it is still ultimate legal owner of all such gold stocks and provided such stocks are not the subject of any security lien, debentures or any insolvency litigation by creditors.

Furthermore, it would be a most challenging task to then provide such gold stocks to a reputable refinery to melt down such bars into exactly the volumes demanded by the multiple customers. Production and logistical costs would be prohibitive.

“Pooled” gold stocks

This is similar to shared-ownership arrangement where the overall gold assets of a bullion dealer are “pooled” together to meet its liabilities to provide physical delivery to its customers.

Whether gold stocks are said to be in “shared-ownership” or “pooled” stocks or unallocated gold outright, custody arrangements where legal title to the gold is ambiguous defeats the very purpose of buying and storing gold. A customer needs the peace of mind and trust that his gold bar holding truly and absolutely belongs to him, is safe, accessible, not at risk of third insolvency litigation and not dependant on ancient traditions such as “bailment” which if they were to be tested in the Courts today, would in any case lead to a very expensive, stressful and protracted litigation process. 

Is your “allocated” gold really “allocated” to you?

In “shared ownership” or “pooled” gold stocks a customer who purchases a certain amount of gold, has no outright ownership of a specifically identifiable gold bar said to be held by a bullion dealer.

A so-called “allocated” gold bar can only be truly “allocated” if it is wholly owned by the customer and segregated, set apart and which cannot be utilised for any other purpose other than making it available for delivery to, or collection by, the customer.

Paragraph 16 of the VAT Notice 701/21: gold published 30 January 2013, by the UK’s  H M Revenue & Customs, defines allocated and unallocated gold as:

Allocated: gold or gold coins are allocated if they are set apart and designated as belonging to, or reserved for specific persons or purposes.

Unallocated: gold and gold coins are unallocated if they remain as an unidentifiable part of a larger stock held by a supplier.

https://www.gov.uk/government/publications/vat-notice-70121-gold/vat-notice-70121-gold

The section on “London Bullion Market – Clearing” on the LBMA website defines Allocated accounts and Unallocated accounts as follows:

Unallocated Accounts

Most traded and settled bullion in London is on an unallocated account basis. This is an account where the customer does not own specific bars, but has a general entitlement to an amount of metal.

Credit balances on the account do not entitle the creditor to specific bars of gold or silver. Instead the balance is backed by the bullion stock of the dealer with whom the account is held. The client is an unsecured creditor.

Allocated Accounts

These accounts are opened when a customer requires title or ownership of specific bars. The client has full title to the metal in the account, with the dealer holding it on the client’s behalf. Clients’ holdings are identified in a weight list of bars, showing the unique bar number, gross weight, the assay or fineness of each bar and its fine weight.

http://www.lbma.org.uk/clearing

Physically segregated gold bars “with your name on it”

Any gold bars which Auric Gold sells to its customers are specifically identifiable with a serial number and available for immediate delivery.

Thus, such gold bars can be said to be “with your name on it”.

Auric Gold knowledge base | all

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