Tether's Gold Grab to Hedge Dollar Volatility Reshapes Global Bullion Markets

Tether's Gold Hoard Surges to 116 Tons, Rivals Small Central Banks

Stablecoin issuer Tether has amassed a gold reserve of 116 tons, positioning itself as one of the largest non-sovereign holders of bullion in the world, according to a report by Jefferies. The company's aggressive accumulation, which totaled 26 tons in the third quarter alone, has drawn comparisons to smaller central banks and is reshaping global gold market dynamics. Analysts suggest Tether's strategy-rooted in diversifying reserves and hedging against U.S. dollar volatility-could further tighten gold supply and amplify bullish sentiment.

Tether's gold buying spree is part of a broader metals strategy that includes investments in royalty and streaming companies, with over $300 million allocated to such ventures this year. The firm has also secured mining concessions and hired top traders from institutions like HSBC, signaling an accelerated push into physical gold markets. Meanwhile, Royal Gold Inc. recently sold shares in mining firm Versamet to Tether, adding to its exposure in the sector.

The impact on gold prices is notable. Jefferies estimates that Tether's purchases account for roughly 2% of global demand, a significant enough volume to influence near-term supply dynamics. This aligns with broader trends: Goldman Sachs reported that central bank gold purchases tripled to 64 tons in September, with China adding 15 tons to its reserves. Tether's buying, however, stands out for its non-traditional origin, as the firm's gold holdings now rival those of smaller central banks.

BiyaPay analysts highlight Tether's dual focus on gold and Bitcoin, framing the strategy as a "composite reserve system" to hedge against dollar fluctuations. By leveraging gold-backed stablecoins like USDT and its upcoming XAUt token, Tether aims to strengthen the long-term credibility of its digital assets. Yet, the firm's planned GENIUS Act-compliant stablecoin, USAT, which won't require gold reserves, introduces uncertainty about future demand for physical bullion.

The surge in gold demand is not limited to institutional players. India's gold imports tripled to $14.7 billion in October, driven by festival and wedding season demand. While Tether's activities are distinct from retail consumption, they underscore a global shift toward gold as a store of value amid economic uncertainty.

Critics and observers alike are watching closely. Tether's gold reserves, now valued at over $13.67 billion, could grow further as USDT adoption expands. However, the firm's opaque reserve structure and the speculative nature of its gold-backed tokens raise questions about transparency and regulatory scrutiny.