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Probably a question that may not have occurred to you, especially if you just have a few Krugerrands or some valuable jewelery. It may be kept safely under lock and key at home or at your bank.

But what if you have, or are considering buying, some physically backed gold ETCs (Exchange Traded Commodity) or what we tend to call ETFs (Exchange Traded Funds)? Most of the worlds mined gold, in bars, is kept in vaults, you would say, like the Bank of England, o Fort Knox or ViaMat (formerly Brinks Mat) in Zurich.

The only investment grade gold is known as the 'good delivery bar'. This is gold that you could sell to a market professional at the 'spot' price.
The ‘good delivery bar’ is defined by the LBMA (London Bullion Market Association). LBMA gold refiners are checked on a 3 year rolling basis. So what is a 'good delivery bar'?
Minimum fineness: 995ppt, Stamped with serial number, refiner, year and fineness. Weight: 350-430 Troy ounces.

The refiner has to be approved by the LBMA and their accreditation has become the internationally accepted gold standard. The gold has to be 'allocated'. That is the client has full title with the dealer who is holding it as custodian.

The vault where the gold is kept will provide a daily list which will include serial number, refiner, purity/assay and year of casting. Of course there are gold bars around that are good delivery 'compliant' and 9999 purity but these are not necessarily acceptable. To summarise, if you are buying gold bars or physical gold ETCs make sure that the gold meets the LBMA standard for 'good delivery'.