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A MELOC, short for Metals Equity Line of Credit, is a revolving loan secured by physical gold, silver, platinum, or palladium bullion instead of a house or a stock portfolio.
You hand your metal over to a lender's storage facility, and in return you get access to cash equal to a percentage of its market value.
You keep owning the metal. You just borrow against it. Battle Bank and Money Metals Capital Group both offer versions of this product, and the structure works a lot like a home equity line of credit, except the collateral sits in a vault instead of a foundation.
Key Points
- A MELOC lets you borrow cash against stored bullion without selling it or triggering a taxable event.
- Most lenders cap borrowing at 50% of the metal's current market value and require six-figure minimum holdings.
- Rates float with the prime rate, and gold's 2026 price run has pushed collateral values, and borrowing power, higher.
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How the Loan Actually Works
You start by transferring eligible bullion into an approved depository, often a Brink's-partnered vault. The lender values that metal at current spot price and extends a line of credit against it.
From there it behaves like a credit card tied to a vault instead of a checking account: draw funds when you need them, pay interest only on what you've drawn, repay, and draw again.
There's typically no credit check involved, because the loan isn't underwritten against your income or credit history. It's underwritten against metal sitting in a vault that the lender already controls.
If you already keep your gold at home or in a safe deposit box, you're generally out of luck until you move it into an approved facility. Lenders won't extend credit against collateral they can't physically control.
Typical MELOC Terms
| Feature | Typical Range |
|---|---|
| Loan-to-value ratio | Up to 50% of metal's market value |
| Minimum collateral | $100,000 in bullion |
| Minimum loan size | Around $75,000 |
| Term structure | 60-month, interest-only, revolving |
| Interest rate | WSJ Prime + 2.75% (with autopay) or + 3.25% (without) |
| Credit check | Not typically required |
| Eligible metals | Gold, silver, platinum, palladium |
These figures come from Battle Bank's published MELOC program and represent one lender's structure, not an industry-wide standard. Terms vary by provider.
Why Someone Would Use One
Say you've built a $300,000 bullion position over a decade. You want to renovate a rental property or cover a business tax bill, and selling the metal means realizing capital gains and losing your inflation hedge at the same moment you might need it most. A MELOC sidesteps both problems. Common uses include:
The Market Backdrop Right Now
Timing matters here because MELOC borrowing power is tied directly to spot price, and 2026 has been an unusually strong year for bullion. Gold traded at $4,357.90 per ounce on August 7, 2026, according to JM Bullion, up 27.99% year-over-year and 6.75% over the prior month, per Trading Economics.
Silver sat at $61.83 per ounce on August 6, according to Fortune, a gain of more than $24 compared to the same date in 2025. Both metals had already touched record highs earlier in the year, with gold peaking near $5,600 and silver near $116 in late January before pulling back.
The Silver Institute has reported that 2025 marked the fifth consecutive year that silver demand outpaced supply, a structural deficit driven partly by solar panel and electric vehicle manufacturing.
Goldman Sachs analysts have projected gold reaching $4,900 per ounce by the end of 2026 on continued central bank buying and rate cuts. For a MELOC borrower, a rising spot price means the same physical bars and coins can unlock more credit than they could a year ago, without adding a single ounce.
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Risks Worth Weighing
None of this is free money. A few things to keep in mind:
Verdict
A MELOC turns stored bullion into usable credit without forcing a sale, and current gold and silver prices mean that credit line is worth more than it was a year ago.
Whether it beats a HELOC or a securities-backed line depends on your rate, your collateral, and how comfortable you are with a margin call if metal prices drop.