How Gold Leasing Turns Idle Metal Into Onchain Yield

Mustafa Centre in Singapore sells roughly 1,100 pounds of gold jewelry a month from a single retail location. By their own account they hold close to a ton of metal at any given moment, somewhere north of $100 million at current prices.

They carry almost no exposure to the price of gold.

That reads like a contradiction, but it is standard practice in the physical gold trade, and it explains where a growing share of onchain gold yield actually comes from.

The Invariant

We spent an afternoon on their floor watching the operation run. The detail that stayed with us was not the volume. It was how they manage the position.

Inventory does not change. Sell 110 pounds of jewelry today, buy 110 pounds of metal back the same day. Sell more tomorrow, buy more tomorrow. The quantity of gold on the premises is treated as a constant rather than a variable.

The consequence is that the business earns the margin on each sale and nothing else. If gold rallies 20%, Mustafa does not make 20% on a ton of inventory. If gold falls 20%, they do not lose it either. Their revenue is a function of how much jewelry moves through the door, not of what the metal does.

A retailer who lets inventory drift becomes a leveraged bet on gold whether they intended it or not. Businesses that last decades tend to make the same choice, because a jewelry business and a commodity trading business need different balance sheets and different investors.

Denominations Matter

Holding a ton of gold requires a ton of gold. At current prices that is a nine-figure asset sitting inside a retail business.

Buying it outright would consume capital better deployed into stores and working capital. So retailers do what refiners, fabricators, and mints have done for well over a century: they borrow the metal and pay for its use.

This is the demand side of the gold leasing market. A lessor with access to physical inventory supplies the metal. The lessee pays a rate to hold and use it, secured against inventory and forward orders. The lessee gets metal without the capital outlay or the price exposure, and the lessor earns a return on an asset that would otherwise sit idle. We covered those mechanics in detail in The Gold Leasing Credit Market Behind thUSD.

What matters here is that the demand is not speculative. It comes from operating businesses with order books, and it persists in every regime, because people buy jewelry when gold is expensive and when it is cheap.

Not in Plain Sight

The gold leasing market is genuinely opaque, and it is worth being straight about the limits of what is public.

The LBMA discontinued the GOFO benchmark on 30 January 2015, so forward and lease rates are no longer publicly calculable the way they were for the two decades before that. GOFO had been published daily since 1989 and was the basis for pricing gold swaps, forwards, and leases. The World Gold Council nets gold held in collateral, deposits, and swaps out of its official reserves series without publishing the netted amount. There is no public print of aggregate leased balances.

What is observable is the scale of the surrounding market. Gold turned over roughly $373 billion a day in June 2026 across OTC, exchange, and ETF venues, according to the World Gold Council. London's clearing system settles over 20 million ounces of gold a day on a net basis between four market-maker banks, with the value of those transfers running around $87 billion a day as of February per LBMA clearing data. That figure excludes a great deal of genuine trading activity, since the statistics are net and by LPMCL's own description omit several categories of transfer. Above-ground gold stock stands at about 219,900 tonnes, of which central banks hold roughly 36,500.

Anyone quoting a precise figure for the size of the leasing market is estimating. That includes us, and we would rather say so than pretend otherwise.

The Other Side of the Lease

A lease has two sides. The retailer wants metal without price risk. Someone has to own the metal and be willing to lend it.

Historically that side belonged to bullion banks and a small set of funds with the vault relationships and credit teams to underwrite operating businesses in the physical trade. The barrier was never the income. It was access.

We reach this market through Libeara, a tokenisation platform incubated by SC Ventures, Standard Chartered's venture arm, and the MG 999 On-Chain Gold Fund it developed with FundBridge Capital. MG 999 is structured as a secured private credit fund: it tracks the performance of gold spot while lending against physical inventory, and Mustafa Gold was named its initial borrower when the fund launched in December 2025. Libeara first connected us with the Mustafa team.

That structure is the point rather than a footnote. Counterparty diligence, fund governance, and the regulatory wrapper sit with institutions that do this work for a living, which is what makes the income stream underwritable by someone who is not a commodity trading desk.

thUSD and thGOLD are built on this market. The counterparties are businesses like Mustafa: real order books, conventional credit assessment, and demand that does not require crypto risk appetite to exist.

What Gold Leasing Means for Onchain Yield

The gold leasing market has financed the physical gold trade for over a century. Retailers borrow metal, pay a lease rate, and carry no exposure to the gold price. Lessors earn a return on metal that would otherwise sit idle.

thUSD and thGOLD are built to route that lease income to token holders. Access, not income, was always the constraint.

Further reading: The Gold Leasing Credit Market Behind thUSD