Gold's Record Run Gets a Second Wind From an Unlikely Corner: Stablecoin Issuers

Gold surges to fresh peak as US Treasury buybacks spark skepticism; Tether expands bullion reserves, central banks boost purchases.

The yellow metal has carved out fresh territory this week, but the forces propelling it are anything but conventional. A Washington bond-market intervention has collided with an extraordinary wave of institutional demand — one that now includes a crypto heavyweight stacking bullion by the tonne.

Gold touched $4,671.20 per ounce on Friday, a three-month peak and fresh record, after climbing 2.1 percent on the day. The immediate catalyst traces back to US Treasury Secretary Scott Bessent, who signaled a sharp expansion in buybacks of long-dated government debt — at least doubling repurchases of bonds and notes for the coming quarter — in a bid to cap rising borrowing costs.

The market's response was swift and forceful. Gold jumped more than 4 percent on Wednesday and has now advanced 5.4 percent over seven sessions, putting it on course for a third consecutive weekly gain. Notably, bullion held onto its gains even as Treasury yields recovered part of their slide — a sign that many market participants view the intervention as a stopgap rather than a durable solution. Bessent has already hinted at further buybacks, which only deepens skepticism about Washington's ability to manage its own financing costs. For gold investors, that skepticism is precisely the point.

Tether's Bullion Bet

Yet the day's most striking development came from an unexpected player. Tether, the stablecoin issuer, expanded its physical gold reserves by roughly 14 tonnes in the second quarter of 2026, bringing its total hoard to 146 tonnes — worth about $18.8 billion at current prices. For a company whose core business is backing a dollar-pegged digital currency, the pivot toward physical bullion as supplementary collateral marks a notable strategic shift.

Tether is hardly alone. The World Gold Council logged central bank purchases of 288.9 tonnes in Q2 2026, up 62 percent year-on-year. Poland's central bank led the charge with 51 tonnes, followed by China's with 33 tonnes. Russia, meanwhile, sold 22 tonnes — the largest institutional net disposal of the period.

Private buyers are adding to the pressure. The China Gold Association reported first-half demand for physical bars and coins jumped 28.42 percent to 339.34 tonnes, even as the country's industrial consumption slipped 2.9 percent to 39.94 tonnes. Jewellery demand tells a different story: it collapsed 17 percent worldwide in the second quarter, with sharp contractions in China, India and Italy as record prices deterred consumers.

Overbought but Undeterred

Speculative positioning has turned increasingly bullish. CFTC data for the week through August 11 showed net-long positions among speculative traders rising by 6,896 contracts to 137,662. Geopolitical friction — namely stalled US-Iran talks over shipping security in the Strait of Hormuz — continues to reinforce gold's safe-haven appeal, while elevated oil prices keep inflationary pressures simmering and complicate the case for imminent rate cuts.

That tension has yet to derail the rally, though caution flags are flashing. The 14-day relative strength index sits at 70.9, edging into overbought territory, and the metal now trades 11 percent above its 50-day moving average of $4,200.41. The current price still trails the 52-week high of $5,586.20 set in late January by roughly 16 percent.

What happens next may hinge on whether the Treasury follows through on its promised additional measures and how bond markets absorb the shifting supply dynamics of US sovereign debt. The interplay between a softer dollar, yield movements and energy prices remains the central driver — but with central banks, Chinese households and now crypto balance sheets all leaning into bullion, the demand base has rarely looked more diverse.