Tether’s growing appetite for physical gold is turning the world’s largest stablecoin issuer into a meaningful new force in the bullion market.
However, is it powerful enough to single-handedly reprice it?
Tether’s Gold Allocation Adds Marginal Demand—but Limited Short-Run Price Impact
CEO Paolo Ardoino has said Tether plans to raise gold to 10–15% of its investment portfolio, up from earlier levels closer to 7%.
“For our own portfolio, it’s reasonable that we are going to have around 10% in Bitcoin and 10% to 15% in gold,” Ardoino said in an interview with Reuters.
The move, if actualized, could formalize gold as a core reserve asset alongside US Treasuries and Bitcoin. With USDT circulation now around $186 billion, that shift implies several billion dollars in incremental gold purchases. This is assuming portfolio growth and retained profits continue.
In practice, Tether may already be close to the lower end of that target. Recent disclosures and reporting suggest the company holds around 130–140 metric tons of physical gold. This stash is valued at roughly $23–24 billion.
This puts gold at 12–13% of its broader holdings after a year of heavy buying and prices above $5,000 per ounce.
Ardoino confirmed that Tether is currently buying one to two tons of gold per week, with purchases set to continue for at least the next few months.
From a market mechanics perspective, the immediate impact is almost entirely on the demand side. Gold supply is notoriously inelastic over short time frames.
Global mine production runs at roughly 3,500–3,600 tons per year, with recycled gold adding another 1,200–1,500 tons. That output cannot scale meaningfully in response to demand spikes over weeks or months.
Tether’s buying therefore draws from existing above-ground stocks, sourced through over-the-counter markets and Swiss refiners rather than futures exchanges.
How Tether’s Gold Buying Shapes Prices at the Margin
At an annualized pace of 50–100 tons, Tether’s demand represents roughly 1–2% of global yearly supply. This is too small to dominate the market, but large enough to matter at the margin.
The short-run effect is tighter physical liquidity. Because Tether is accumulating deliverable metal and vaulting it rather than rolling paper exposure, it can reduce the pool of readily available gold held by dealers and custodians.
During periods of strong concurrent demand from central banks or ETFs, that tightening can narrow bid-ask spreads and make prices more sensitive to incremental buyers.
On price, the influence is best described as supportive rather than explosive. Weekly purchases of one to two tons amount to a small fraction of daily global trading volumes, particularly in futures markets.
But the buying is predictable, balance-sheet-driven, and cumulative, which helps reinforce price floors.
In isolation, flows of this scale could contribute 1–3% upside over short periods. This is especially true when the dollar is weaker, real yields are falling, or geopolitical risk is heightened.
Equally important is the expectations channel. Ardoino has repeatedly framed gold as a central bank–style reserve asset, language that resonates at a time when official institutions themselves are buying aggressively.
Central banks have added more than 1,000 tons annually in recent years. Tether’s emergence as a large, transparent buyer reinforces the narrative of gold as a preferred hedge against currency debasement and political risk.
That signaling effect can crowd in additional investors, amplifying price moves beyond Tether’s direct flows.
Still, there are limits. Even at the top end of its stated target, Tether’s gold accumulation does not alter gold’s long-term supply curve, nor does it rival the combined weight of sovereign buyers and ETFs.
Nevertheless, macro drivers, including Federal Reserve policy, dollar strength, and global risk sentiment, remain decisive.
The bottom line is that Tether’s gold push adds a new structural demand floor to the market. In the short run, it tightens physical availability and supports prices at the margin.
But it is a stabilizer, not a destabilizer, reinforcing an already bullish backdrop rather than triggering a standalone surge in gold prices.
As of this writing, gold was trading for $5,549, up by almost 30% year-to-date.
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Source: https://beincrypto.com/tether-gold-reserve-central-bank-scale/