Is Gold Being Tied to the Stablecoin Bandwagon?

For investors who view gold as a safe haven and a tool for preserving value, the fact that one of the largest buyers of gold in recent months is a core enterprise from the highly speculative world of cryptocurrency might give them pause for thought...

Previous attention had been focused on central bank reserve managers—some monetary authorities remain wary of the Western freeze on Russia's foreign reserve assets following the 2022 Russia-Ukraine conflict. Coupled with large-scale purchases by private buyers and strong inflows into gold ETF funds, the classic narrative of "safe-haven funds flooding into gold" has taken shape.

As of the end of September, Tether held a total of 116 tons of gold for its clients—equivalent to approximately $14 billion at current prices. This makes it the largest single holder of gold outside of major central banks, with a scale comparable to the official gold reserves of countries such as South Korea, Hungary, or Greece...

From the perspective of gold's performance, this year's rocket-like surge in gold prices has unfolded in two waves. The first wave occurred in the first four months of the year, with prices soaring by nearly $1,000 per ounce, peaking in April during the "Emancipation Day" tariff impact under Trump, during which the U.S. dollar simultaneously fell by 10%.

The second wave of gains occurred from mid-August to mid-October, during which the U.S. dollar did not weaken further, but gold prices surged by another $1,000.

For most of the year, central banks have indeed remained the "elephants" in the market—with combined gold purchases of approximately 220 tons in the second and third quarters. However, the influence of marginal buyers like Tether also appears to be extraordinary.