How to earn from gold: leasing the metal as a tool for income and capital protection

Investors can turn gold from a passive asset into a source of income by leasing it to financial institutions, earning yields of 1% to 5% per year while preserving capital against inflation.

Gold has historically been considered one of the most reliable assets, especially during periods of financial instability. Unlike paper currencies, which are subject to inflation and devaluation, gold maintains its intrinsic value and even appreciates during crises. This makes it attractive not only for storing capital but also for generating income through leasing. Leasing gold allows owners to earn interest while providing liquidity to major players in financial markets.

A notable example is the 2008 financial crisis, when central banks and investment funds actively used gold in repo transactions to obtain short-term liquidity. During this period, the Bank of England leased approximately 400 tons of gold to large funds and banks at yields ranging from 0.5% to 2% per year. Such transactions helped market participants maintain cash flows and reduce risk amid falling values of other assets. Similarly, after World War II and during the 1970s oil crisis, gold served as a tool to protect capital from inflation and currency collapses.

Today, gold leasing operates similarly. Owners can lease their metal to banks, brokers, or financial funds through platforms that ensure storage, accounting, and legal processing of transactions. On average, yields on such leases range from 1% to 3% per year, but during periods of high market volatility, they can reach up to 5%. Gold remains under the owner’s control: it is stored in secure vaults, and transactions are backed by physical metal.

Leasing gold benefits both owners and financial institutions. Banks and funds use leased gold for operations in the futures market, risk hedging, or covering short-term obligations. Investors earn income on an asset that would otherwise simply be held, while protecting capital from inflation. Historically, gold prices rise when central banks implement quantitative easing (QE) and expand the money supply. For example, after 2008, gold increased by more than 150% over five years, reflecting the decline in the purchasing power of the dollar.

Leasing gold allows investors to generate income on an otherwise idle asset. In times of high inflation and volatile markets, it provides both stability and profit, confirming that gold retains its value even during a crisis.