i find it all a bit confusing, but i presume its paper gold being paid out in ounz. it would be pretty cool if the gold interest was paid in little gold coins being delivered in the mail

stack_harder

 I've wondered for a while. When I've looked at the behind-the-scenes of the gold market (

) I think it's some sort of futures-financing dealing ultimately backstopped by miners: they lock in commodity prices for the metals (and thus, the "yield" is coming from e.g., Monetary Metals financing it)

A gold-dealing bank often lends out its gold to borrowers who use the bullion as collateral for various types of financial market trades and operations. The bank charges interest on the loan but is in the deal for interest revenue rather than gold price exposure, so it hedges out the price risk by selling gold futures.

That seems clear enough: the bank gets interest, the borrower carries 

, the holder of futures contract takes later delivery of gold.

podcasts

Stacker_Sports

"I Lost Complete Faith in the Mainstream Media" Hans Niemann & Peter McCormack

denlillaapan

*that* I've wondered for a while. When I've looked at the behind-the-scenes of the gold market (https://stacker.news/items/896492/r/denlillaapan) I think it's some sort of futures-financing dealing ultimately backstopped by miners: they lock in commodity prices for the metals (and thus, the "yield" is coming from e.g., Monetary Metals financing it)

> A gold-dealing bank often lends out its gold to borrowers who use the bullion as collateral for various types of financial market trades and operations. The bank charges interest on the loan but is in the deal for interest revenue rather than gold price exposure, so it hedges out the price risk by selling gold futures.
> That seems clear enough: the bank gets interest, the borrower carries [price risk](https://thedailyeconomy.org/article/theres-no-such-thing-as-socially-harmful-speculation/), the holder of futures contract takes later delivery of gold.

[https://thedailyeconomy.org/article/golden-hiccups-in-our-modern-financial-system/](https://thedailyeconomy.org/article/golden-hiccups-in-our-modern-financial-system/)