Gold’s Resurgence: Central Banks and Institutional Investment Drive Demand
In recent years, gold demand has surged, primarily driven by central banks and institutional investors. Over the last three years, these monetary authorities have collectively acquired more than 1,000 metric tonnes of gold annually. In the first half of 2025 alone, institutional investments in gold exchange-traded funds (ETFs) reached US$38 billion (approximately AU$57.78 billion), highlighting a significant shift towards secure asset allocation amidst ongoing economic uncertainties.
The landscape of gold investment has dramatically transformed as many institutions seek to hedge against inflation and political instability. These dynamics are further intensified by a growing apprehension regarding the reliability of currency systems, prompting central banks to actively increase their gold reserves as a precautionary measure.
As gold prices peak in 2025, with physical gold nearing US$3,400 (about AU$5,169) per ounce, Tether Gold (XAUt)—a blockchain asset backed by physical gold—has emerged as an attractive option for both central banks and investors. There are currently over 259,000 units of XAUt in circulation, representing 7.66 tonnes of gold and now boasting a market capitalisation exceeding US$800 million (AU$1.22 billion). Over the past year, the value of XAUt has risen by an impressive 40%, reflecting the growing demand for digital assets that offer stability similar to traditional gold.
The Surge in Gold Purchasing
The World Gold Council indicates that central banks are continuing their buying spree, a stark contrast to past decades when they were net sellers of gold. The trend towards stockpiling gold is largely attributed to rising geopolitical tensions and the evolving nature of economic risks. Christopher Gannatti from WisdomTree points out that central banks are increasingly leaning into gold as a safeguard against the potential political manipulation of currency systems.
Simultaneously, institutional investors have shown keen interest in gold ETFs due to an atmosphere fraught with worries about inflation and economic downturns. The influx of US$38 billion in the first half of 2025 resulted in an addition of 397.1 metric tonnes to ETF holdings, signalling robust support for gold as a preferred asset class in uncertain times.
Tether Gold: A Modern Investment Vehicle
Tether Gold stands out as a pioneering digital asset as it links the traditional security of gold with the enhanced liquidity provided by blockchain technology. Available on various trading platforms, including Bybit, Bitfinex, KuCoin, and Maxbit, Tether Gold offers investors an innovative means of interacting with gold, leveraging its status as a safe-haven asset while also embracing the benefits of digitisation.
The launch of Tether Gold as an omnichain asset on The Open Network, facilitated by Tether’s USDT0 liquidity solution, further enhances accessibility and relevance in the digital finance realm.
Conclusion
As we navigate an unpredictable global economic environment, the enduring appeal of gold remains strong, particularly among central banks striving to fortify their financial standing. The substantial investments in both traditional gold and blockchain-integrated assets like Tether Gold suggest a transformative shift in the investment landscape, blending the timeless allure of precious metals with the high-velocity modern finance scene. With inflation concerns persisting, demand for gold as an apolitical store of value is likely to continue its upward trajectory.
