Miscarriage - where is my baby now and why did God allow it

First: your loss is a real loss, your child was a real child, and your grief needs no justification - to God, that little one was known and seen: 'thou hast covered me in my mother's womb' (Psalm 139:13). Why God allowed it, Scripture does not answer case by case - we live in a broken creation that 'groaneth and travaileth in pain' (Romans 8:22), and God's promise is not exemption but presence: 'The LORD is nigh unto them that are of a broken heart' (Psalm 34:18).

As for where your baby is: when David's infant son died, he said with settled confidence, 'I shall go to him, but he shall not return to me' (2 Samuel 12:23) - he expected reunion. Jesus said 'of such is the kingdom of heaven' about little children (Matthew 19:14).

Believers through the centuries have rested on the mercy of God toward those who die in infancy, and you may too. Grieve at your own pace, name your grief to people who can hold it, and do not carry blame that is not yours - this was not your fault.