Three words decide what you actually own when someone else holds your bullion. Allocated means specific, identified metal is yours; unallocated means you hold a claim against the storage provider rather than a bar. Segregated means your metal is kept apart from everyone else's; commingled means it sits in a shared pool that you own a share of. They are not interchangeable, they are not marketing adjectives, and the only place they are defined for your account is the storage agreement you sign.
This article explains what each term does, what the default legal position looks like in Texas when goods are stored for someone else, and the specific clauses worth reading before you leave metal anywhere.
This article is educational and reflects general information about precious metals and collectible coins. It is not investment, tax or legal advice, and Stout Gold & Silver is not a registered investment adviser, broker-dealer or tax professional. Metal prices fluctuate and past performance does not indicate future results. Consult a qualified professional about your own situation.
The three terms, side by side
The terms answer two different questions. Allocated and unallocated answer what do I own. Segregated and commingled answer how is it stored. An arrangement can be allocated and commingled at the same time, which is where most of the confusion starts.
| Term | What it answers | What you hold |
|---|---|---|
| Allocated | Ownership | Specific identified metal, recorded to you |
| Unallocated | Ownership | A contractual claim on the provider, not a bar |
| Segregated | Storage method | Your metal, physically kept apart from other customers' |
| Commingled (pooled) | Storage method | A share of a shared quantity of like metal |
Allocated means specific metal is recorded to you
Allocated storage is an arrangement in which identified metal is held for you and recorded as yours. In the wholesale market the record is precise: the London Bullion Market Association describes an allocated account as one where the holder receives "a weight list of bars, plates or ingots showing the unique bar, plate or ingot number, gross weight, the assay or fineness of each bar", and notes that in an allocated account "the investor does not have a credit exposure to the institution where the account is maintained."
That last clause is the point of the whole arrangement. The metal is not the provider's to lend, pledge or sell, and it is not part of what a creditor could reach if the provider failed. What you should expect to see, in return, is a fee — LBMA notes that allocated holders pay a storage fee.
Unallocated means you are a creditor, not an owner of a bar
Unallocated storage is an arrangement in which no specific metal is set aside and your holding is a claim on the provider. LBMA is blunt about it: the account holder "has a contractual claim against the clearer – rather than a specific bar", and "a credit balance on an account means that the owner of the metal has credit exposure to the institution where the account is held."
Unallocated arrangements are normal and long-established in the wholesale market, and they are cheaper precisely because nobody is holding a numbered bar aside for you. They are a different thing from allocated storage, and a retail programme that uses the words "your gold" while operating on an unallocated basis has told you something about marketing rather than about ownership.
Segregated and commingled describe where the metal sits
Segregated storage means your metal is physically kept apart — its own container, shelf or compartment, identifiable as yours. Commingled or pooled storage means like metal from several owners is stored together, and your entitlement is a share of the pool rather than particular pieces.
Commingling is not a defect. For fungible bullion — generic rounds, common-date sovereign coins, standard bars — a pool is cheaper to run and cheaper to buy into, and the metal that comes back is metal of the same specification. It matters when the pieces are not fungible: a hand-poured bar with a pour mark you chose, a graded coin in a slab with a certification number, or anything where you want the same item back rather than an equivalent one. Those belong in segregated storage or nowhere.
What Texas warehouse law does when the contract is silent
Texas has a default rule for goods stored with a warehouse, and it is a useful reference point even where it does not directly apply. Section 7.207 of the Texas Business & Commerce Code provides that "Unless the warehouse receipt provides otherwise, a warehouse shall keep separate the goods covered by each receipt so as to permit at all times identification and delivery of those goods. However, different lots of fungible goods may be commingled."
Two things follow. First, the receipt governs — the statute's own opening words hand the question to the document. Second, the statute sets out what commingling means for ownership: "If different lots of fungible goods are commingled, the goods are owned in common by the persons entitled thereto and the warehouse is severally liable to each owner for that owner's share." It also addresses the failure case directly, where "because of overissue, a mass of fungible goods is insufficient to meet all the receipts."
Whether any particular storage arrangement is a warehouse within Chapter 7 is a legal question and depends on the facts and the paperwork. The reason to read the section anyway is that it shows what the law considers the important variables: identification, delivery, shares in a pool, and what happens when the pool does not cover the receipts. Those are the same four things a good storage agreement addresses.
The clauses worth reading in a bullion storage agreement
A storage arrangement with a dealer or vault is a private contract. Everything below is settled by that document rather than by custom, and every one of these is a fair question to ask before signing.
- Allocation. Is the metal allocated to you, and how is that recorded — a bar list, serial numbers, weights, a numbered lot?
- Segregation. Is your metal kept apart, or is it a share of a pool? If pooled, what defines your share?
- Title. Does the agreement say ownership stays with you, or does it transfer to the provider in exchange for an obligation to deliver?
- Use. May the provider lease, lend, pledge or sell the metal it holds?
- Delivery. How do you get it back, in what notice period, in what form, and at what cost? Does a pooled arrangement return the same pieces or equivalent ones?
- Insurance. What insurance exists, who holds the policy, what perils it covers, and what it values the metal at.
- Audit. Who counts the metal, how often, and do you get the report?
- Fees. How storage is charged, on what basis, and what happens to the metal if fees go unpaid.
- Insolvency. What happens to your metal if the provider fails.
- Statements. What you receive, how often, and whether it identifies metal or states a balance.
Storage with a dealer is not a bank deposit and is not federally insured. Whatever protection exists is the protection the contract provides.
Why regulators point at storage specifically
The Commodity Futures Trading Commission's customer advisory 10 Things to Ask Before Buying Physical Gold, Silver, or Other Metals warns, in its discussion of the costs attached to holding metal in a self-directed IRA, that "Some fraudulent dealers have charged storage and insurance fees for metal that never existed."
That is the reason the paperwork matters more here than in almost any other retail transaction. A storage statement is a piece of paper that says metal exists somewhere. The documents that make it more than a piece of paper are the allocation record, the audit report and the delivery clause.
What Stout Gold & Silver does and does not do here
Stout Gold & Silver has been family owned and operated in the Texas Panhandle since 1986, and we hold metal in our own vault on the premises. We are a coin and bullion dealer rather than a bank or a trust company. This article sets out the questions to put to any storage provider, and they apply to us on the same terms as to anyone else; it does not describe Stout's own arrangement, and no article should be the place you learn that from — the agreement is.
If you are still deciding between keeping metal at home and storing it elsewhere, that is a separate question with its own trade-offs, and we have written about it in bullion storage versus a home safe. If you are buying first and deciding later, our bullion range and numismatic coins are both on the site, and if you are moving metal the other way, selling to us starts with the same conversation across the counter.
Frequently asked questions
What is the difference between allocated and segregated storage?
Allocated describes ownership: specific identified metal is recorded as yours. Segregated describes storage: your metal is physically kept apart from other customers'. An arrangement can be allocated but pooled, where you own a defined quantity of metal that is stored alongside other people's. Read both terms in the agreement rather than assuming one implies the other.
Is commingled storage safe?
Commingled storage is a normal arrangement for fungible bullion and is not inherently riskier than segregated storage. What changes is what you are entitled to: a share of a pool rather than particular pieces. The risk sits in the contract terms — how the share is recorded, who audits the pool, and what happens if the pool is short.
Will I get the same bars back from pooled storage?
Usually not, and the agreement will say so. Pooled arrangements typically return metal of the same specification rather than the same physical items. If you want the specific bar or the specific graded coin back, you need segregated storage and an agreement that says the item is identified and returnable.
Is stored bullion insured?
Only if the storage agreement says so, and only on the terms it states. Storage with a dealer is not a bank deposit and carries no federal deposit insurance. Ask who holds the policy, what perils it covers, how the metal is valued for a claim, and whether you are named on it.
What is a bullion storage agreement?
A bullion storage agreement is the contract that sets out who owns the stored metal, how it is held, how it is returned and what the provider may do with it. It is the document that decides everything the words "allocated" and "segregated" imply, so the terms in the contract govern rather than the terms in the advertising.
Does Texas law require my metal to be kept separate?
Section 7.207 of the Texas Business & Commerce Code requires a warehouse to keep goods separate "unless the warehouse receipt provides otherwise", and permits fungible goods to be commingled. Whether a given arrangement is a warehouse under that chapter is a legal question. Read the agreement, and take legal advice if the answer matters to you.
What to ask before you sign a storage agreement
Bring the questions. The ten above are the ones to put to any provider you are considering, and the answers belong in the agreement rather than in a conversation — including ours. If you want a second pair of eyes on the terminology before you take a document to your attorney, come in or call. We are on SW 7th, weekdays only.
Stout Gold & Silver
2300 SW 7th Ave Ste 105
Amarillo, TX 79106
(806) 374-8698
Mon–Fri 10:00–16:00 · Sat closed · Sun closed
stoutgold.co
