What it is:
The Federal Reserve Bank of New York provides, among other things, gold storage for foreign governments and central banks. This gold is in the form of bars, which allows the bank to weigh it, stack it, and move it easily. In the United States, the Federal Reserve creates gold bars in three locations: Denver, San Francisco and New York. As of 2012, the Federal Reserve Bank of New York housed approximately 530,000 gold bars weighing a total of 6,700 tons. The gold is stored in a series of metal , each one dedicated to a separate account holder.
How it works/Example:
Gold nuggets are hard to count, inconvenient to weigh and difficult to transport. Melting the gold and forming it into bars makes things much more convenient. Below is an image of gold ingots from the Federal Reserve.
Note that ingots don't always have to be bars; the idea simply is to condense and organize the material, as many cultures have done for thousands of years.
Why it matters:
An ingot is a material -- usually metal -- that has been formed into a shape that eases its transportation.