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Gold leasing is a financial arrangement where gold is borrowed (leased) from a lender (usually a bank or a gold leasing company) for a specified period in exchange for a fee. It’s commonly used in the jewelry industry, manufacturing, and by investors who need gold but do not want to purchase it outright.

Key Features

• Leasing Fee: The borrower pays a fee, often based on a percentage of the gold's value, to lease the gold. This fee can be fixed or variable depending on the lease terms.
• Duration: The lease is usually for a specific period, ranging from a few months to several years. At the end of the lease period, the borrower is required to return the equivalent amount of gold or pay the current value of the gold.
• Flexibility: Gold leasing offers flexibility to businesses, especially jewelers, as they can use the gold without the need to lock in large amounts of capital.
• Hedging: It allows companies to hedge against gold price fluctuations. If the price of gold rises, the lessee benefits because they are using the gold at the original lease price.
• Ownership: During the lease period, the ownership of the gold remains with the lender, and the borrower must return the gold or its equivalent value at the end of the lease.