Why Are Companies Paying More Than Ever To Lease Gold?

Gold is often described as a “non-yielding asset.”

• Unlike stocks, it doesn’t pay dividends.  
• Unlike bonds, it doesn’t pay interest.  
• Unlike real estate, it doesn’t generate rental income. 

For that reason, many investors assume gold simply sits in a vault until it’s sold. 

Yet there’s a curious contradiction: every year, businesses around the world pay to lease gold.  

More surprisingly, they’re paying higher rates than they were just a few years ago. 

If gold were truly an unproductive asset, why would businesses pay up to 4% per year to rent it?

Historical gold lease rates, 2016-2026

Gold lease rates are rising.

Markets constantly communicate information. 

Rising prices, falling yields, and changing leasing costs all reveal something about supply, demand, and economic incentives. 

Gold lease rates are no different. 

Their recent movement may appear to be just another data series, but it could reveal something far more significant about how businesses value—and use—physical gold. 

Gold lease yields remained relatively stable for years. 

In a gold lease, investors lend physical gold to qualified businesses that pay a yield for its use. Naturally, lease rates fluctuate from year to year.  

Still, the average annualized lease yield earned by lessors participating in our gold leasing program remained remarkably consistent between 2016 and 2021.  

During that period, annual averages generally clustered around 3%, suggesting a relatively stable market for gold financing. This consistency is noteworthy because the broader financial environment changed dramatically over those years. 

Interest rates, inflation expectations, commodity prices, and economic conditions all shifted, yet gold lease yields remained within a relatively narrow range. 

Possible conclusion:

Rather than reflecting speculation, lease rates are primarily influenced by the economics of businesses that rent gold and the availability of gold to lease. 

The market began repricing after 2022. 

• Beginning in 2022, lease rates started moving higher. 
• By 2024, the average annualized lease yield had risen above 3% again.  
• In 2025 it increased further, and in 2026 it’s approached 4%. 

At first glance, these changes might seem modest. But viewed over several years, they represent a meaningful repricing of the cost of leasing gold. 

Interestingly, this occurred even as many traditional yield instruments experienced changing fortunes alongside monetary policy. 

While yields across conventional financial markets often rise and fall with central-bank policy, the gold leasing market is driven by a different question: 

How much are businesses willing to pay for access to physical gold? 

What do rising lease rates signal? 

In most markets, rising renting costs reflect one of two conditions:

1. Demand has increased. 
2. Supply has become relatively scarcer. 

The gold leasing market is no different. 

When more businesses compete to lease gold—or when fewer investors are willing to lease it—lessees generally need to offer more attractive lease rates. 

That doesn’t necessarily mean every increase stems from the same cause. Markets are complex, and lease rates respond to numerous factors. 

What higher lease rates do suggest, however, is that businesses continue to find renting gold valuable enough to justify paying more for it.

How could they justify paying more for a “non-productive” asset? 

Gold doesn’t manufacture products, generate cash flows, or produce earnings in the same way that a business does. Once it’s mined and refined, an ounce of gold remains fundamentally the same for decades (or even centuries).  

Yet the existence of a thriving gold leasing market suggests that this description is incomplete. 

Companies don’t pay to lease assets that have no productive use. They lease assets that help them operate, grow, and generate revenue. 

As lease rates rise, the market is sending a simple message: 

Gold has economic value beyond simply being bought, stored, and sold. 

Why do companies lease gold in the first place? 

For companies whose revenues and costs are both tied to gold, renting the metal itself can better align their financing with their operations. 

Rather than tying up large amounts of capital in inventory, businesses pay for the use of the asset while deploying their capital elsewhere. 

Also, leasing gold can simplify financing. Because both their assets and obligations are denominated in gold, they can finance their operations without introducing additional currency exposure or relying on separate hedging strategies. 

There’s much more to the economics of gold leasing than these examples alone. Read “Why would anyone lease gold? 3 analogies that explain it” for a deeper exploration of this concept. 

Rising lease rates reflect the value of access to gold. 

Markets constantly assign prices to scarce resources. 

Just as the purchase price of gold reflects what buyers are willing to pay to own it, lease rates reflect what lessees are willing to pay to use it. 

Those are two distinct markets measuring two different kinds of value. When lease rates rise, it indicates that businesses are placing greater value on temporary access to gold. 

That doesn’t necessarily mean every lessee shares the same motivation, nor does it guarantee lease rates will always continue rising. But it does demonstrate that businesses see sufficient economic benefit in renting gold to justify paying for that privilege. 

Viewed through that lens, lease rates become a measure of gold’s usefulness within the productive economy. 

What do rising lease rates reveal about gold ownership?

Gold has served as a store of value for thousands of years and remains an important component of many long-term portfolios. 

But rising lease rates invite you to consider a different question. 

If businesses are willing to pay increasingly attractive rates to rent gold, should every ounce simply remain in storage? 

You have more than one way to think about your holdings. 

Many financial assets serve multiple purposes.

• A share of stock may appreciate in value while also paying dividends.
• A bond can provide both principal repayment and periodic interest.

Likewise, gold can continue serving as a long-term monetary asset while also participating in productive economic activity. 

(This concept is particularly valuable during periods when gold prices are flat.) 

So rather than “What will each ounce of my gold be worth in the future?”, you could instead ask yourself  “How many additional ounces can my gold yield?” 

Gold yield increases your gold ownership. 

One of the unique characteristics of our leasing program is that returns are paid in gold rather than fiat currency. 

Some investors purchase gold with the goal of increasing their long-term ownership of the metal itself. For those investors, success isn’t measured solely by the dollar value of a portfolio at the end of the year. 

It’s also be measured by the number of ounces they own. 

After all, the value of your gold holdings is a function of two variables: the price per ounce and total ounces. 

And earning additional gold through leasing empowers you to increase your holdings without purchasing additional ounces outright. 

Put your gold to work with Monetary Metals

Claim: Gold is an unproductive asset. 
Fact: Companies are paying more than ever to rent it. 

The upward trend in gold lease rates suggests that access to physical gold continues to hold real economic value for companies that depend on it.  

Rather than sitting idle, leased gold can support productive commercial activities before returning to its owner. 

If businesses recognize the value of putting gold to work, should you consider doing the same? 

To determine whether gold leasing aligns with your long-term investment objectives, explore the benefits of opening an account today.

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