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Gold certificates allow gold investors to avoid the risks and costs associated with the transfer and storage of physical bullion by taking on a different set of risks and costs associated with the certificate itself. Banks may issue gold certificates for gold, which is allocated or unallocated. Unallocated gold certificates are a form of fractional reserve banking and do not guarantee an equal exchange for metal. Allocated gold certificates should be with specific numbered bars, although it is difficult to determine whether a bank is improperly allocating a single bar to more than one party. The first paper bank notes were gold certificates. They were first in the 17th century when goldsmiths in England and The Netherlands used them for customers who kept deposits of gold bullion into their safekeeping. Nowadays, gold certificates are by gold pool programs in Australia and the United States, as well as by banks in Germany and Switzerland.

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