The gold industry frequently misuses the word ‘ownership. There are many ‘gold ownership’ programs that claim to offer the opportunity to buy gold with the ‘lowest cost of ownership.’ The use of the word ‘ownership’ gives the impression that you own the gold bought but is this true?
Legal ownership is possible only if you also hold the asset sold to you or if you can provide proof of ownership. The first criterion for proof of ownership is that the asset must be uniquely identified so that you own the specific asset. For example, you own an apartment because it has a unique address. You own a vehicle because it has a unique number plate.
The second criterion is using a legal document to transfer ownership of that specific asset to you. In the real estate world, there are land titles. For commercial transactions, the invoice serves as proof of ownership. If the company you are storing gold with gives you a certificate of ownership, that is not legal ownership as certificates have no legal bearing. You are still a creditor.
By the same measure, bank deposits are not ownership-based. You can be the de-facto owner of U.S. dollar banknotes while you hold them. However, once you deposit the banknotes into a bank, you cease to be a banknote owner and have become an unsecured creditor to the bank.
Programs that allow customers to buy gold fractionally online are notorious for misrepresenting gold ownership. Such programs often allow the purchase of gold in small increments at prices much lower than physical gold.
Some people may think they own gold, but if the above-mentioned criteria for proof of ownership are not present then they are not the rightful owners. On most online platforms, you will not find invoices with serial numbers of specific gold bullion in them. Instead, your accounts only show that you purchased a certain number of generic gold grams (or troy ounces). You are thus creditors to the company offering the gold program, not owners of gold.
If such online platforms claim they allocate gold, then who owns the actual gold in the program? In most cases, the company is the gold owner while people like you are creditors having a claim on the gold. Often, ‘allocated’ just means there is gold present. It has no bearing on who owns that gold.
If all gold is present to back customers’ claims, such programs could be seen as fair trade as customers give up ownership for the convenience of having some exposure to the gold price. However, if the gold backing such programs are partially or not even present at all, or perhaps leased to another entity, the price for convenience will be high for you. Oftentimes, such programs work only during peaceful times. They are prone to fail during a financial crisis or when there is gold shortage.
If you are looking to speculate on gold prices in the short term, such gold programs that allow buying of fractional gold can be convenient and cost-effective. However, if you intend to truly secure your wealth from the next financial crisis, such storage programs offer little protection because you will not own any gold until you convert the fractional gold grams into physical gold – the gold grams remain an I.O.U until you take physical delivery.
How InProved Is Different
At InProved, our mission is to keep and grow wealth to sustain you during any crisis. We ensure invoices and safe receipts are only issued to your holding company and no-one else. Each of the invoices are audited to ensure that they really identify who is the beneficiary when paid. We then store the physical bars and coins with storages like Le Freeport who issue the safe receipts addressed to the holding company, accessible only by directors and officers of the holding company which include you and us as fiduciaries. We intentionally created this fiduciary system to make us accountable, making any cheating easily detectable. Commercial breach of trust is a criminal offense.
All purchased bullions have a unique serial number. Ownership of serial numbers is transferred to you using commercial invoices that indicate specific bullion items. Commercial invoices, like receipts, are proof of purchase, and they can be held up in court as proof of ownership. Falsifying invoices in Singapore is a criminal offense.
All holding companies come with a Unique Entity Number and a certificate of incumbency that states your name as owner of the holding company. It also includes the officers of the holding company, which consist of yourself and an InProved fiduciary, as well as a corporate secretary who is responsible for compliance functions.