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When you open an account with Monetary Metals, funding the account is simple: either ship physical metal you already own to us, or provide bank funds and we purchase gold on your behalf. This metal is initially placed in secured storage before being deployed in a lease or bond.
What do I actually own in my account with Monetary Metals?
The short answer? You own physical precious metals!
Here’s how it works:
We hold your metals in custodial accounts at state-of-the-art, fully secured, fully insured, professional vaults—vaults with the highest levels of security. Your account agreement refers to these facilities as “Depositories.”
How does Monetary Metals hold your gold or silver in these custodian Depositories?
As described in your account agreement, your metal is held at a Depository in one of two forms.
“Products” are precious metals bars or coins manufactured by recognized mints, accredited refineries, or certifying bodies such as the London Bullion Market Association (LBMA).
“Pool” is physical precious metals in a liquid or readily marketable form. Pool takes the form of the aforementioned bars or coins, but also bullion or other physical forms held by a Depository. Pool may include LBMA bars and other designated “good delivery” bars, or gold coins issued by certain sovereigns such as American Gold Eagles or South African Krugerrands. Pool also may include other forms of physical metals such as ingots, castings, doré, or grain. But pool is always physical precious metals in known weight and purity held at a Depository.
These physical metals are “pooled” for liquidity. Pool allows Monetary Metals and the Depository to quickly execute trades as needed to fund leases or bonds, and to distribute lease and bond income to our clients. Pool also allows Monetary Metals to perform trades even in fractions of an ounce when paying that lease and bond income monthly to thousands of investors.
Analysis from the World Gold Council highlights the same advantages: pooled, allocated holdings improve liquidity and efficiency while preserving full physical backing.
For simplicity, we’ll refer to your metal (either gold or silver) held with Monetary Metals as “Monetary Metals (MM) Allocated Pool.”
Here’s what you need to know about your MM Allocated Pool:
- MM Allocated Pool means you retain title to your metal. You hold an undivided interest in a portion of the physical precious metals making up the pool. Your metal can be redeemed in physical form from the Depository.
- Your metal is “allocated” pool, and this is key. Allocated pool is owned by you in physical form; unallocated pool is merely a paper or contractual claim as an unsecured creditor against the holder of metals. Our contract with each Depository details this allocated pool arrangement, and expressly states that allocated pool owners retain title.
- Our contract with each Depository also creates a “bailment,” which is a legal arrangement where goods are delivered to a custodian without transfer of ownership. This means your metals are 100% physically present at all times at the Depository. Even were the Depository to fail, your MM Allocated Pool belongs to you.
- Bailment means your gold never goes on the Depository’s balance sheet; is never hypothecated (i.e. pledged as collateral), never leveraged (borrowed against), and never traded on margin or otherwise.
- MM Allocated Pool at a Depository always represents 100% of the total ounces owned by Monetary Metals account holders—there is no fractional lending or other use.
In sum, it’s important to understand what you own as Monetary Metals account holder– how title to metals is retained, what forms your metals can take, and the contractual relationship between you, Monetary Metals, and a Depository. We believe our legal and custodial structure creates one of the safest and marketable ways to own precious metals.
