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Gold Leasing: Amidst the rising prices of gold, rich investors have found a new way of earning. Now they are earning money by giving their gold on ‘rent’. The increasing demand from jewelers and refiners has turned gold leasing into a high-return option. Now gold is not just kept, but has become a source of income earning 2-7 percent every year.
New Delhi. Gold prices are continuously making records and meanwhile the strategy of rich investors is changing rapidly. Now they are not just leaving the gold in the safe, but are earning money by giving it on ‘rent’ to jewelers and refiners. This trend called gold leasing or gold renting is increasing rapidly in India, because there is huge demand for gold in every season, from festivals to weddings. Gold lease rates in India, which earlier used to be 2-3 percent, have now increased to 6-7 percent, making it even more attractive for investors.
How does the entire model of gold leasing work?
This entire process works like a kind of gold loan, only gold is not lent in cash. Investors hand over their gold to a leasing platform or institution, which is then used by jewelers and manufacturers. They use this gold to make jewellery, sell it in the market and finally return the same gold to the investor, also adding interest ‘on the gold itself’ of about 2-7 per cent. The duration may range from a few weeks to months. In this way, gold not only benefits from increase in value but also from regular income. The demand for gold leasing has suddenly increased in 2025 and many companies have registered an increase of up to 20 times.
Are there risks? The rich know, so they are careful
The biggest risk in gold leasing is that the borrower of the gold – such as a jeweler or refiner – may default. In such a situation, the investor is not able to get the gold back on time. Additionally, if gold prices suddenly increase, the investor may lose out on that potential profit. There is also a liquidity risk because the gold given on lease is not immediately returned. In some cases, there is a possibility of loss due to logistics and handling also. Therefore, most platforms arrange for bank guarantee, insurance and strong due diligence to minimize these risks.
Why should small investors not do gold leasing?
This option is not that easy for small investors. Most gold leasing programs demand a minimum of 100 grams or more of gold, which is not possible for an everyday investor. Apart from this, it is also difficult to withdraw gold in case of immediate need, due to which its ’emergency fund’ feature is lost. Experts believe that SGB (Sovereign Gold Bond) is a better option for small investors because it is safe, gives 2.5 percent fixed interest and benefits are available even when gold prices rise. At the same time, digital gold or gold ETFs are also better, because they have liquidity and security.
