Trustable Gold’s Review Criteria
We provide an overview of and review the offers of providers of vaulted gold based on transparent criteria. Providers which meet certain criteria (based on the information provided by them) are marked. Trustable Gold is independent from the providers and does not take fees for its reviews.
The key criteria for reviewing providers of vaulted gold are:
- Client ownership of vaulted gold
- Insured storage by a reputable and independent vault operator
- Transparent, regular external audit
- Delivery or withdrawal option
- Price transparency
- Further requirements
The information taken into account for the review is based on information released by the providers which is generally not verified by Trustable Gold.
1. Client ownership of vaulted gold
Investors who buy vaulted gold become the owners of their gold. The gold becomes – legally and economically – the investor’s property. This implies that, similar to investment funds or mutual funds, a potential default on the part of a provider does not affect the ownership of the gold by the client.
Providers of vaulted gold only meet the criterion “client ownership of vaulted gold” if they additionally guarantee that no gold is loaned under the standard terms and conditions without explicit consent of the individual investor.
2. Insured storage by a reputable and independent vault operator
Storage of the gold is handled by a professional, reputable and accredited (e.g. with the London Bullion Market Association – LBMA) vault operator.
The vault operator has to be independent from the provider of the vaulted gold, i.e. acts as a third party custodian. In addition the vaulted gold has to be insured against common risks.
3. Transparent, regular external audit
The vaulted gold holdings are audited at least once per year by an independent and accredited audit firm and a precious metals inspection company. The results are published.
Regulated banks are exempted from the publication of the audit results. It is assumed that the legal audit requirements and regulatory supervision of licensed banks satisfy the safety needs of investors.
4. Delivery option
Clients have a delivery or withdrawal option for their gold holdings.
5. Price transparency
The costs and fees for purchase and storage of gold holdings are published on the provider’s website.
6. Trading frequency/ liquidity
The criterion for liquidity and fungibility assesses the client’s ability to easily and quickly buy and sell vaulted gold through the product provider. We use a five-step rating scale from “very low” to “very high” to assess and help visualize the liquidity of a provider’s products. Providers that allow clients to buy and sell gold around the clock daily (at least on workdays) receive the “very high” liquidity/fungibility rating. On the other end of the spectrum, providers which do not allow their clients to purchase and sell gold on a daily basis (workdays) and do not offer automated services for the sale and purchase of gold receive the liquidity/fungibility rating of “very low”.
As mentioned above, providers of vaulted gold that have a banking license and fall under the supervision of a financial regulator are exempt from the criterion of transparent external audit, since they are subject to strong policies and corporate governance requirements.
A full banking license regularly poses significantly higher requirements on financial institutions than other licenses, e.g. for financial advisors. For that reason, only fully licensed banks based in stable countries with an established regulatory framework are exempt from our criteria for transparency and a regular external audit.
Non-banks have to meet the above detailed requirements, especially with regards to independent custody and transparent, external audit.
According to the current legislation of most countries, providers of vaulted gold are not required to have a banking license.
8. Further safety requirements
We might consider further criteria for our review of vaulted gold providers.