Unallocated gold is gold that can be ‘owned’ but it is not gold physically set aside for you. It allows banks to sell more gold than they physically have in their vaults. The legal title to the gold may sit with the provider rather than the person who has bought the unallocated gold.
Unallocated gold makes it easy for funds and investors to quickly add gold to their portfolio but in reality, it is not the same as physically owning gold. Unallocated gold exposes you to the same risks as having your cash in the bank: if you want to redeem it you cannot and the gold that it is said to represent may well not physically be held by the bank at all.
It is now possible to own allocated gold of your own without going through such an investment – this can be done by buying physical gold and having it at home or buy purchasing allocated gold via a smartphone app which can then be spent anywhere in the world.