It’s a black or white issue: Either you own uncompromised bullion bars for which you have title documentation that are stored in secure allocated storage, or you have an unallocated account that can be settled in cash at the issuer’s discretion. The fine print on your precious metals account or bank certificate should make it clear. Yet many investors with unallocated accounts are shocked when they attempt to take delivery of the gold.
First, purchase the bullion. Once payment is made, documentation transferring ownership to the purchaser must include the name of the refiner, the serial number, the weight and purity to three decimal places. While client identification for money laundering and anti-terrorism compliance must be kept by the seller, the seller should provide a written confidentiality agreement to maintain the privacy of the client.
Second, place your bullion in secure allocated storage. This means an LBMA-member vault, an allocated storage agreement (read the fine print), and a reputable storage facility. Storing your bullion at home is not always practical, and it’s certainly not wise for large holdings. Private insurance on bullion stored at home, if you can get it, will be far more expensive than allocated insured storage fees. Selling your bullion, once it has been removed from the LBMA chain of integrity will require the added expense and delays of having the bullion re-assayed.