As Gold Prices Pull Back, Tether Accelerates Gold Purchases! Buys Another 14 Tonnes in Q2, Reserves Rise to 146 Tonnes

In the three months ended June, Tether purchased 14 tonnes of gold for its reserve assets, continuing its previous trend of sustained buying. The company has now become the largest known non-bank, non-sovereign institutional holder of gold globally.

According to Tether's quarterly reserve audit report, its gold reserves increased to 146 tonnes by the end of June, valued at approximately $18.8 billion.

Throughout the quarter, gold prices remained weak. Inflation concerns sparked by conflicts in the Middle East drove bond yields significantly higher, exerting pressure on gold assets, which do not generate interest income.

Tether also disclosed that its net operating profit for the second quarter was approximately $1.5 billion, down from $4.9 billion in the same period last year.

Accelerated Gold Buying Pace: Adding Positions Again After Q1 Slowdown

For over a year, Tether has been one of the largest single buyers in the global gold market.

In the fourth quarter of 2024, its gold purchases exceeded 21 tonnes, but slowed markedly to 6 tonnes in the first quarter of this year. The return to 14 tonnes in the second quarter indicates a recovery in its buying pace.

Tether's scale of gold purchases is linked to some extent to the issuance volume of USDT. Tether's business model involves exchanging US dollars for USDT and investing the received funds in assets such as U.S. Treasury bonds and gold to generate returns.

The net increase in USDT circulation in the second quarter amounted to nearly $500 million, providing funding sources for the simultaneous expansion of its gold reserves.

Exploring Monetization of Gold Operations, Lending Scale Gaining Momentum

While continuously increasing its holdings, Tether is also actively exploring ways to convert its massive gold reserves into revenue sources. Gold.com, a U.S. precious metals dealer in which Tether holds equity, announced in February this year the launch of a gold leasing business with a scale of at least $100 million.

According to Gold.com's quarterly filings, as of March 31, outstanding lease contracts and customer prepayments between the company and Tether totaled $363 million. The two parties also have agreements for precious metals storage and trading.

In terms of talent acquisition, Tether recruited two senior precious metals traders from HSBC Holdings Plc late last year, claiming it aimed to build the "world's best gold trading platform." However, both were laid off within the following few months, indicating adjustments to the related strategic plans.