Unallocated gold certificates are gold certificates which entitle their holder to shares in a gold pool, rather than title deeds to physical gold. Ownership of unallocated gold certificates does not translate into ownership of physical gold.
The benefit of unallocated gold certificates is that they do not generate storage charges. While these certificates are well-suited to trading, they do not serve as title deeds to actual physical gold and are only backed by the issuer.
Issuers may allow investors to convert unallocated gold certificates into allocated gold certificates by paying a fee for the production and delivery of the corresponding physical gold.