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Difference between Unallocated and Allocated Silver?

 

Investors choose to invest in silver bullion because of its role as both a precious metal and an industrial metal. Over 50% of silver mined is used in industry, in fact demand by industry is increasing so much that there is expected to be a silver shortage in the coming years.

Silver is so attractive to industry thanks to its physical properties, which make it ideal to be used in the majority of technological applications that spring to mind. Currently it is its role in batteries and renewable technologies that everyone is excited about. As the world is forced to turn to a more sustainable way of living, silver will be vital to many of the applications that help us to do this.

Furthermore, silver brings an element of security to a balanced portfolio. It has long been deemed an inflation hedge during times of geopolitical disruption. But, this combined with its strong industrial role means it is an excellent metal to hold whether times are good or bad.

Which silver certificate from The Perth Mint should I buy? 

 

The only distributor of the Perth Mint Certificate Program in the EU and UK is GoldCore, one of a select group of distributors worldwide. 

 

Anyone wishing to hold physical silver certificates as part of their portfolio should strongly consider the Perth Mint Certificate Program (PMCP), which is the only government-backed precious metals certificate programme in the world. 

 

One of the most esteemed mints in the world, The Perth Mint is one of the safest places to buy and store your silver. It fabricates more than 500 tonnes of precious metals annually and is recognised by the five main bullion banks. It is owned by the Government of Western Australia who also guarantee the Perth Mint Certificate Program. 

 

When you buy a Perth Mint Silver Certificate through GoldCore you can choose from two options:

 

Allocated Silver Perth Mint Certificates

Unallocated Silver Perth Mint Certificates

 

Unallocated and Allocated Silver is held as an asset on the balance sheet of the Mint, and the silver that has been sold to clients is recorded as a matching balance sheet liability. Therefore, the unallocated accounts are 100% backed by silver and the asset and liability are fully matched. Any credit or insolvency risk is highly unlikely given that The Perth Mint is owned by the Government of Western Australia.

 

Both options offer investors the opportunity to hold physical silver, within the insured, government-backed storage facility of The Perth Mint, at a low cost. However, there are some key differences which are highlighted below. 

 

What is unallocated silver

 

Many GoldCore clients prefer to own unallocated silver certificates with The Perth Mint as it is a very economical way to hold physical silver in your portfolio. It is a cost effective way to hold the precious metal because no storage or fabrication fees are incurred. 

 

The price of unallocated silver Perth Mint Certificates is made up of the following components:

 

  • The silver spot price - this is the price quoted by The Perth Mint for silver available for delivery in two days’ time. It is taken from the price quoted in the global silver market and is the same price you will see on the likes of Bloomberg and Reuters. 
  • The spot price premium - this is a percentage of the spot silver price. The amount of silver purchased will affect the premium charged. 
  • The certification fee - When you buy precious metal through the Perth Mint Certificate Program you are issued with a unique certificate that names you as the legal holder of a specific  silver that is held at The Perth Mint. 




 

What is allocated silver?

 

Allocated silver certificates give the holder legal title to a specific cast silver bar. The bar (or bars) are then kept in segregated storage within The Perth Mint’s highly secure and insured vault facility. 

 

Owning allocated silver is preferred by some who find comfort in knowing that their silver is readily available for inspection in the vault, by the Auditor General of the State of Western Australia who is answerable to the State Parliament. The segregated bars are also available for personal collection or secure delivery, should you so choose. 

 

The price of allocated silver certificates is made up of the same components as the unallocated silver price certificates but there is an additional charge that forms the total price. This is the fabrication fee. 

 

The fabrication fee is the cost for a cast bullion bar which you wil have legal title to and held in segregated storage, within the The Perth Mint’s vaults. 

 

Investors should be aware that storage fees are also applicable when you choose to hold an allocated silver certificate from The Perth Mint. When you purchase Allocated Silver held at the Perth Mint there is a storage charge of 1.95% per annum. Unallocated silver certificates attract no storage charge or fabrication fees.

How to buy allocated and unallocated silver

It is very straightforward to buy allocated silver certificates and unallocated silver certificates from The Perth Mint, through GoldCore.

Buying Perth Mint Certificates is very easy. You will need to provide ID documents and fill in an application form.

  1. Open an account,
  2. Upload your identity documents,
  3. Await your application form and when ready email it back to us. If you have any questions, you can call us at any time.

When you buy allocated or unallocated Silver through the PMCP, The Perth Mint issues a Precious Metal Certificate in your name, detailing the specific number of ounces of silver that you own and that is stored on your behalf in the Mint. Unallocated Silver clients have legal title to the silver stored in their account. Every certificate has a unique certificate number and is akin to a certificate of ownership.

The quantity of silver purchased will depend on the price per ounce of the metal and the amount that you have decided to invest. Perth Mint Certificates are highly liquid and can be sold through GoldCore.

Upon settlement of PMCP buy orders, The Perth Mint will send GoldCore a certificate confirming the quantity of Silver purchased. If you sell part of your PMCP holding, upon settlement, The Perth Mint will send GoldCore a new certificate confirming the quantity of silver remaining.