Gold prices have been on a tear this year, and the rich aren't just sitting on their shiny bars anymore. Instead of keeping their gold locked away in vaults, more wealthy investors are leasing it out and earning passive income without ever selling a single ounce.
A New Way To Put Gold To Work
Gold has long been seen as a safe-haven investment, especially during times of inflation or market volatility. But while it's a great store of value, gold doesn't naturally generate income like stocks or bonds. That's now changing.
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“We've got a whole bunch of phone calls with people saying, ‘I have $2 million of gold bars, I have a million dollars worth of gold bars. Can you lease it out for me?'” gold leasing platform SafeGold founder Gaurav Mathur told CNBC recently.
Platforms like SafeGold and Monetary Metals are making it easy for individuals to lease their bullion to refiners, jewelers and fabricators. In return, they earn yields ranging from 2% to 4%, sometimes even higher. “People are no longer just buying gold and waiting for it to go up to $5,000,” Monetary Metals founder and CEO Keith Weiner told CNBC. “They want to hold it regardless of price—and then the mind immediately turns to: how do I put it to work?”
The model works like this: investors lease their gold, which is then lent to companies that need it to make jewelry or components. Instead of paying back cash, the companies return the same amount of gold. This setup protects both sides from price swings and gives jewelers a way to fund inventory without big loans.
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Mathur said that SafeGold's leasing volumes jumped from $2 million to $40 million since the start of the year, driven by growing comfort among wealthy investors.
Leasing isn’t entirely new, as central banks and bullion institutions have been doing it for years. What's new is how accessible it's become for everyday wealthy investors. As long as gold prices remain strong, many are seeing it as a smarter, quieter way to make their gold work for them.
How To Start Investing In Gold
For new investors, there are a few ways to get started in gold depending on your goals. Some prefer physical gold, like bars or coins, which you can buy through dealers or government mints and store yourself or through custodians.
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Others may choose to buy shares in gold mining companies or invest through gold-focused exchange-traded funds, which track the price of the metal without requiring physical storage.
There are also gold individual retirement accounts for those planning for retirement, which allow gold to grow in a tax-advantaged account. Each method has different costs, liquidity levels and tax treatments, so it's worth doing your homework or speaking with a financial advisor.
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