A unstable macroeconomic panorama has sparked a brand new gold rush amongst institutional traders and central banks, with gold bullion hitting document highs this yr — a pattern that has additionally prolonged to Tether’s gold-backed digital token.
By the top of the second quarter, Tether Gold (XAUt) — a tokenized commodity providing direct publicity to bodily bullion — was backed by 7.66 tons of nice troy ounces of gold, in keeping with the corporate’s newest attestation report, verified by BDO Italia.
This reserve helps over 259,000 XAUt tokens in circulation, giving the asset a complete market capitalization exceeding $800 million.
The value of Tether Gold carefully tracks the market worth of bodily gold, which is buying and selling slightly below $3,400 per troy ounce. XAUt successfully brings gold onto the blockchain, combining the timeless attraction of the yellow steel with the portability, divisibility and redeemability options generally related to Bitcoin (BTC).
Over the previous 12 months, XAUt’s worth has surged by 40%, mirroring the efficiency of spot gold, in keeping with Bloomberg data.
Tether Gold, which launched in January 2020, is on the market for buying and selling on a number of main crypto exchanges, together with Bybit, Bitfinex, BingX and KuCoin. The token not too long ago expanded its presence to Thailand by way of the Maxbit cryptocurrency trade.
As Cointelegraph reported, Tether’s liquidity community, USDT0, not too long ago launched an omnichain model of XAUt on The Open Community (TON).
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Gold demand beneficial properties momentum amid macroeconomic and geopolitical turbulence
Whereas crypto traders have lengthy touted Bitcoin as “digital gold,” providing related qualities to bullion with added portability and digital-native options, bodily gold stays the last word safe-haven asset throughout occasions of uncertainty.
In accordance with the World Gold Council (WGC), world central banks accrued over 1,000 metric tons of bullion in 2024, marking the third consecutive yr surpassing that milestone. The Council additionally famous that the overwhelming majority of central bankers count on bullion reserves to proceed rising over the subsequent 12 months.
“This isn’t regular,” wrote Christopher Gannatti, world head of analysis at WisdomTree, commenting on the speedy tempo of gold accumulation by financial authorities. “For many years, central banks have been internet sellers of gold. Now they’re stockpiling it once more.”
“In a world of rising geopolitical threat and forex weaponization, gold is likely one of the few property that travels properly throughout borders and regimes,” Gannatti added.
Institutional traders have adopted go well with, pouring billions into gold exchange-traded funds (ETFs) within the second half of 2024.
This momentum has carried into 2025, with the primary half of the yr witnessing the most important gold ETF inflows in 5 years, in keeping with WGC data. Gold ETFs recorded $38 billion in inflows throughout the first six months, growing collective holdings by 397.1 metric tons of bodily bullion.
The surge in demand has been pushed by escalating geopolitical and financial considerations, together with US President Donald Trump’s trade war, which has amplified fears of financial instability and a possible recession.
Economist Peter Schiff has additionally highlighted persistent inflation dangers as a key driver of gold’s attraction. Inflationary pressures have resurfaced in america, with the Federal Reserve anticipating worth will increase to speed up within the second half of the yr as tariffs push prices larger for producers and customers.
This outlook has prompted a cautious stance on financial coverage. Morningstar’s senior US economist, Preston Caldwell, noted that he has “delayed expectations of fee cuts” in gentle of those inflationary developments.
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