Tether Identified as Surprising Force Behind Gold’s Record-Breaking Rally

Investment bank Jefferies says the extraordinary surge in gold prices this year can’t be fully explained by traditional market drivers—and points instead to Tether as an unexpected but powerful new source of demand. In a recent report, Jefferies analysts highlighted that attestation data and on-chain activity suggest the stablecoin issuer has been steadily accumulating large quantities of physical gold, tightening supply and contributing to the metal’s sharp rise to around $4,080 per ounce, more than 50% higher year-to-date.

Jefferies first noticed signs of Tether’s gold strategy after the company held meetings with mining and royalty firms in Denver last fall. Investors informed the bank that Tether was aiming to buy roughly 100 tons of gold in 2024. Additional clues—including CEO Paolo Ardoino’s public comments about diversifying reserves with bullion and a sudden $1,000-per-ounce spike in gold—added weight to these early signals.

According to analysts led by Andrew Moss, Tether held at least 116 tons of gold at the end of Q3. About 12 tons back its XAUt token, valued around $1.57 billion, while roughly 104 tons support USDT reserves, totaling an estimated $13.67 billion. This makes Tether the largest non-sovereign gold holder globally, comparable to the reserves of smaller central banks. XAUt’s market cap remains near $1.5 billion.

What stands out most is the speed of accumulation. Tether bought approximately 26 tons in Q3 alone—about 2% of global quarterly demand. While not enough to overshadow central-bank purchases, the buying spree has tightened supply and amplified bullish sentiment in the gold market.

Jefferies expects Tether to continue accumulating gold as USDT expands, with bullion holding steady at around 7% of reserves. If Ardoino’s projection of $15 billion in 2025 profit materializes, allocating even half of that toward gold could add nearly 60 tons annually.

Tether’s growing involvement in the broader gold ecosystem further reinforces this thesis. The company has invested more than $300 million in royalty and streaming firms this year and recently hired two top HSBC metals traders—moves Jefferies sees as evidence of an accelerating long-term metals strategy, even as Tether prepares its GENIUS Act-compliant USAT stablecoin, which will not require gold reserves.