Oh, ok. Well, if the file does not have sensitive information (passwords, SSNs, etc), then you can just store it anywhere you want, though people will be able to read it if they find where it's stored. If it does contain sensitive informations (which it sounds like), then you should store the file outside of the webroot (the root directory of the web server) and outside of any folder that the http server has access to. You'll probably need to open it like this:
fopen("/path/to/file.xml", "r+");
You'll want to use an absolute path to the directory and file, since you won't want it to have anything to do with where the script that creates the XML file is. The file should probably also be chmod'ed to 600 (read and write for the owner, no other permissions) and should be owned by the web server user (usually http or apache, on apache installs).