I invited Keith Weiner, CEO of Monetary Metals, to explain how to get interest paid in gold, in this guest post. 
The following discussion does not constitute financial or investment advice from either me or Keith Weiner.
Getting a Real Yield in Gold – By Keith Weiner
If you could earn 3% on gold paid in gold, or 3% on dollars paid in dollars, for the next 30 years, which would you choose? I suspect many, if not most, would choose gold. Dollars are constantly being devalued by the Federal Reserve. And then there’s the unavoidable and opaque bank risk. If 2023 has taught us anything, it’s that bank risk is alive and well 15 years after the Great Financial Crisis.
The dollar system is harmful to the health of savers, and people need an alternative. Earning interest on gold is that alternative.
How Does Earning a Yield on Gold Work?
Monetary Metals Gold Fixed Income products (gold leases and gold bonds) provide that yield by financing qualified gold-using businesses.
Monetary Metals vets and matches qualified businesses who need gold, with investors who want to earn a yield on their gold.
Who Would Want to Lease or Borrow Gold?
Some gold businesses need to hold gold inventory, or work-in-progress. For example, jewelers, refiners, mints, bullion dealers, recyclers etc. They need to finance this gold somehow. The conventional solution is to borrow in dollars, buy gold (which incurs gold price risk), then hedge the price risk via futures contracts. But hedging adds complexity, risks, and costs to the business, not to mention the debt they just put on their balance sheet.
A gold lease is the ideal way for a company to finance the physical gold inventory or work-in-progress it needs for its business. It eliminates price risk for the company, and therefore, the need to hedge. It’s a simpler, easier, and cheaper way for the company to finance its gold inventory needs.
A helpful way to think about gold leasing is that the company is essentially renting the gold from you. Renting (leasing) the gold helps the company get the gold it needs for its business, without the hassle of managing a fluctuating gold price. The company can focus on making a profit on their products, while you get to focus on watching your gold grow every month as you receive your lease payments in gold.
Monetary Metals gold leases offer investors a short commitment, the security of knowing you own physical metal, which is insured, and a way to earn interest on gold, paid in gold (we offer silver leases too, which pay interest in silver). Structured as true leases of personal property, the leased gold always remains in physical form. Title to the gold remains with you, the investor. The gold is not loaned or hypothecated at any time. The gold is never an asset of the lessee, or of Monetary Metals. And both the lessee and Monetary Metals maintain insurance to safeguard against risk of loss.
Gold Leases and Gold Bonds
Our next gold lease, which opens next week, is paying 5% on gold.
Monetary Metals also offers Gold Bonds. Gold bonds are private securities and only available to accredited investors. Borrowers are companies that are looking to finance growth or expansion through gold-denominated debt. Gold bonds offer substantially higher returns than gold leases but have different risks. Our most recent gold bond pays 19% to clients.
Thank you for considering.
Keith Weiner, CEO of Monetary Metals
Mish Disclosure and Comments
I have an affiliate relationship with Monetary Metals. That means I am not an unbiased advocate. Having said that, I have known Weiner for many years, and I respect what he is doing at Monetary Metals.
One of the complaints I have heard over the years is “Gold earns nothing. It has no yield.”
That’s no longer true. Now you can earn interest on gold, paid in gold, at rates that are set by the free market, not by the Federal Reserve.
I asked Keith to do a brief MishTalk TV episode, to go over a few more points. That video follows.
If you’re interested in learning more about earning interest on gold and silver through Monetary Metals, or if you have any questions on how this works, please get in touch through my Affiliate Partner Sign Up Page.
MishTalk TV With Keith Weiner
Once again, If you’re interested in learning more about earning interest on gold and silver through Monetary Metals, or if you have any questions on how this works, please get in touch through my Affiliate Partner Sign Up Page.
Questions? Try the Monetary Metals FAQ.
Monetary Metals FAQ
https://monetary-metals.com/faq/
Regarding Withdrawals
Clients can initiate a partial or full withdrawal of any metal not on lease by request at any time by completing a one-page form. Metal can be sold for cash, redeemed for physical delivery, or shipped to a different storage account.
Metal that is being leased would need to wait for the lease termination before it can be withdrawn.
Thanks, Mish! I would add that the Monetary Metals website DOES disclose the identity of their gold & silver lessees. This transparency is very important b/c it enables would-be investors to properly gauge their risk.
Hello Carlos,
Yes, that’s correct. We send a slide deck to every client with detailed information on who is leasing the gold, how it’s being leased, what the risks are, and how those risks are mitigated. Clients can opt out of any lease they do not wish to participate in.
Try getting that kind of transparency, and freedom of choice, from your local bank!
is the % rate in WEIGHT or Dollars??
Hello Carlos,
Thank you for your comment. We address withdrawals and how to redeem in physical metal in our FAQ’s, specifically here: https://monetary-metals.com/faq/#withdrawals
As for the time it takes to withdraw… if you’re withdrawing metal that’s not actively deployed in a lease or bond, that can be completed in 1-2 weeks. For metal that’s already in a lease or bond, you must wait until the lease or bond matures before that metal can be withdrawn.
This concept is interesting. As Mish said, it’s not different from lending a tool to a neighbor. It makes sense for gold & silver users to borrow gold & silver for their work in progress: jewelry, industrial, electronic.
Mish, one thing that may add some confidence is adding info about how one gets the physical gold & silver back & how long getting it back takes. I realize that you’re an affiliate — not an owner — of Monetary Metals, but their website appears devoid of specific information about this topic. Understandably, would-be gold & silver lenders want to know how they’d get their metals back!
Good Comments Carlos – I will have Keith log in an reply.
Am I missing something, or is an assurance that I would ever see my gold again missing from this promotion? I went through all the company’s web site Q&A’s, and found no mention of this most-important matter.
Unless informed otherwise, I’m gonna make sure I’m not going to find that someone Madoff with a substantial portion of my wealth.
You lend your gold. There is no “guarantee” you get it back.
When you lend someone money, there is no guarantee you get it back.
When you lend your neighbor a tool, there is no guarantee you get your tool back.
Is this different than what you expect?
Sheeesh.
Why would anyone have to point out the 100% obvious.
Can one withdraw one’s actual physical gold and take physical possession of it? If not, this is completely a bet on the solvency and trustworthiness of the company holding the gold.
Whether or not you can take your gold back, there is implied trust in two areas.
1: In Monetary Metals
2: In the company leasing your gold.
There is implied trust in GoldMoney, BitGold, and BullionVault as well. There is implied trust in the ETF OUNZ run by Axel Merck. If you don’t trust these firms or ETFs then don’t use them.
Mish,
You’ve gotten nearly 100% negative responses on this idea. I for one, am intrigued by the potential of making some return on my gold. If possible, I would love to see a post attempting to rebut a lot of the arguments above. Thanks.
If you want to earn interest on gold, you have to take risks in gold. It’s not for everybody. Keith mentioned he has not had a default in I believe 55 offerings.
Funny how no one makes a fuss over the fiat.
Gold is gold.
If you give dollars for a paper where an off-shore company promises it will buy gold, lend it to someone, who will invest somewhere…
This is not fiat money, this is more faith than Pope’s.
5%? That is a rate that compensates for the risk of loaning fiat currency which has an intrinsic value of zero. If whoever they lease the gold to goes under, my gold is gone. If they themselves commit fraud, my gold is gone. If the government decides to confiscate by raiding their operations with armed forces, my gold is gone. The entire purpose of holding physical gold is to have no counterparty risk. That is why I paid more than 5% premium over spot to acquire my physical gold. To think I am going to put in in the hands of some stranger and only be compensated 5% is crazy. I can get more than that with a short term treasury bond and not hassle with all the risk of dealing with someone who might turn out to be another FTX of sorts!! Even 10% is not nearly enough. I have to be getting at least 20-25% or I’m not even considering this kind of thing.
5 % in what? the Price in dollars? OR % in WEIGHT? ill take that deal in grams thank-you
At what point do people become more concerned with return OF their capital than return ON their capital. SBF is a criminal yet he walks free. There are no more laws anymore. Just rich people in league with Satan and everyone else.
beelzebub / trump 2024 or if you like beelzebub/ biden 2024
Hello SURFAddict,
We pay the interest in physical gold, monthly. If you have 100 ounces, earning 5% annually, then you will have 105 ounces at the end of the one year term. The dollar price of gold will obviously rise or fall during that time, but that does not impact the performance of the lease. Our aim is that your ounces are always growing, regardless of what the dollar price does.
“Weight” is our preferred measurement for money as well…:)
thanks for clarifying!! Much appreciated!
Hold gold privately as an insurance policy. Lending it out makes it visible to interested parties (and we know who that is).
Foregoing “interest” is the price one pays for a higher degree of security.
Gold is 2,000/oz. $10,000 buy 5oz. // 5oz x 31.1 = 155.5 gr.
3% of 155.5 grams = => 4.66 grams dividends.
How many of you would rather be paid interest paid in gold vs. gold IOUs?
Hello Billy,
In our gold leases, we pay the interest monthly in physical gold, that’s vaulted and insured. You can sell it for dollars, or request it for delivery.
In Oct 2008 the Fed raided “other” people bank accounts for the first time. Gold
JOLTED from $650 to $2,000. That jolt caused a systemic change in the Jewelry
industry. Renters couldn’t pay their gold landlords. They went bk. In 2011 landlords
who became multi millionaire didn’t care. They became arrogant and invincible. Thereafter they were subjected to 2 shocks : gold plunge to 1,000 in 2015 and their tenants were gone. The surviving landlords want u to finance their capital, to shift the risk to u.
How do your Gold Holdings carry a “guarantee” that the Holdings are real?
Is there a Certified Audit? Are the Gold Holdings vaulted. Or, are these “proven reserves” yet to be mined?
Askin’ for a Friend.
Blockchain?
Hello David,
Thank you for commenting.
We work with industry leading vaults and liquidity providers for buying/selling/vaulting/shipping and insuring physical gold for our clients. We rely on our vault partners’ expertise when it comes to ensuring the authenticity of precious metals in the vault. The gold is always vaulted and insured when not in a lease, and we do not charge storage fees for gold that isn’t in a lease yet.
When the gold goes on lease, it is insured through the lessee’s policy (we are named as the loss payee), and an additional policy we carry. All the vaults we work with are audited, and we are audited as well. I hope that helps address your questions. If you’d like to drill deeper, you’re welcome to send us an email at relationships@monetary-metals.com.
this little experiment nixon did only 52 years ago, defaulting on gold exchanging for paper and computer currency, is just a short stint. not a doubt in the world the world will make it’s way back to it again. the russians pegged the ruble to gold via discounted oil sales at beginning of war after we stole their computer currency. worked like a charm. under reported and mis understood. pax dumbfuckistan is going the way of all over extended imperial episodes from USSR to UK france spain and romans……………..
why would a company want or need “gold-denominated debt”… ?
Back when I was in gold mining, the company got the money to build the mill with a gold loan. The lender gave the company the gold, which the company sold to get dollars to build the mill.
Once the mine was running the leader got back so many ounces per quarter plus extra ounces for interest.
The lender didn’t do so well, as the going price at the time of the loan was $450 or so, (the lender was sure it go back up to at least $600) but most of the loan was paid back at less than $400.
Rumor had it the manager who approved that loan was sacked. 😉
Hello Siliconguy,
Our clients seek a gain in ounces, not dollars. Our gold leases and gold bonds are denominated in ounces, not dollars. The lessees and the borrowers we work with are obligated to pay in ounces, not dollars.
The dollar price of gold may go down during a lease or loan, but, if we do our job, the number of ounces our clients’ own will go up.
Only reason I can think of is that normal hedging mechanisms aren’t available to that company, either for legal/country of origin issues or financial/creditworthiness issues. At 19%, you have to think credit is the problem. If a futures house won’t deal with you due to credit or other reason, I’m not sure why I would. Feels like I’m being pitched for crappy investments on an economics blog. There’s an ick factor here.
You said it brother. Besides, 5% is a joke. 10% is a joke. Even 20% is borderling joke for the risk you are taking.
It’s like saying, hey man, let me drive your brand new lambo. I’ll give you $350 a month. LOL.
Hello Matteo,
We answer those questions here: https://monetary-metals.com/investing/gold-fixed-income/gold-bonds/
And here: https://monetary-metals.com/the-benefits-of-issuing-gold-bonds/
The short answer is: to match their liabilities with their assets. If you have a gold income, but borrow in dollars, you’ve got a mismatch. This creates problems, some of which could be serious, or fatal (see hedging in gold miners).
Gold Bonds pay 19%? How? Why would anyone pay 19%?
If something sounds too good to be true…
It didn’t say it was risk free, it just said you can earn 3% lending out your gold.
That lending carries the same risk as lending cash, namely that if the borrower goes bankrupt, you lose your asset.
Hello TexasTim65,
Thank you for commenting. The leased metal is not held on the balance sheet of the lessee. Title to the gold remains with the client (the lessors) throughout the process. Our leases are structured as true leases of personal property, not loans. The gold should not be available to creditors in the event of a bankruptcy, and we have the right to repossess the gold within two days notice at any time.
Gold leases are more akin to auto leases or rental property leases. You own the asset, and you’re renting it for use. If the renter (lessee) fails to pay, or violates any other part of the agreement, you (we) repossess the asset.
How well does that work if your client is a foreign entity… sy the Turkish lease you currently have on offer.
How do you go about reposssessing physical gold in Turkey?
3% doesn’t sound all that good.