“In the UK, Baird & Co are dealers of good reputation and will also store allocated bars, which makes it easier to sell.

“Coutts Bank will also store gold [in your own box] if you have a bank account with them, but they are not dealers.

“Most of the small Swiss banks also run allocated [and non-allocated] accounts although they are more expensive as you guessed.

“If you take delivery of physical gold, you will have to convince the buyer that the gold has not been tampered with. Best to store with the dealer.

“The issue may not be tungsten, it may be loans, re-hypothecation and other such nonsense that the banking system has devised."

Eoin Treacy's view Thank you for this informative email. The derivatives market for gold is considerably larger than the physical market and this has been used as an argument in favour of higher prices for quite some time.

As with other financial derivatives, the market only tends to run into trouble when delivery it not possible. Since the vast majority of gold is held in vaults and rarely moves, the only way the derivatives market could come undone is if the largest holders decided to take physical delivery in their own vaults en masse. This remains an outlying possibility.