The gold worth has reached a brand new excessive many times.
Since late August, the gold worth has entered a brand new spherical of loopy rise and repeatedly refreshed its historic excessive. As of the time of publication, COMEX gold as soon as reached $4,392 per ounce through the intraday buying and selling on October 17, refreshing its historic excessive once more. The cumulative improve up to now six buying and selling days has reached an astonishing 10%. Furthermore, within the brief interval of lower than two months from August 20 to October 16, the rise within the gold worth inside this era has even reached a tremendous 30%.
Chart: COMEX gold futures worth, complete market worth of Tether Gold tokens and PAXG cash. Supply: Wind, DefiLlama, 36Kr
In our “Perspective” article “The Fed’s curiosity – charge reduce is a accomplished deal, and the worldwide playing second for the gold worth has arrived”, a core judgment is that the gold worth will certainly rise when the Fed cuts rates of interest. After the Fed introduced an curiosity – charge reduce on September 17 native time, the gold worth rose accordingly, and the above judgment has been fulfilled. As well as, the article additionally identified that the continual enlargement of gold – backed stablecoins will present lengthy – time period assist for the gold worth. The lengthy – time period constructive relationship between the gold worth and the size of gold – backed stablecoins additionally confirms the above logic.
So, what are the interior logics behind the latest steady file – breaking highs of the gold worth and the sharp rise within the complete market worth of gold – backed stablecoins? The place do the opposite core driving forces for the upward motion of the gold worth come from?
Gold is changing into “crypto – centric”
An necessary motive for the continual file – breaking highs of gold this 12 months is that the market has excessive expectations for the enlargement of gold – backed stablecoins.
At present, the capital market has a powerful demand for stablecoins. From the angle of buying and selling quantity, the market broadly acknowledges two units of knowledge from ARK Make investments led by Cathie Wooden and Deutsche Financial institution. ARK Make investments’s report exhibits that the overall world buying and selling quantity of stablecoins in 2024 reached as excessive as $15.6 trillion. Deutsche Financial institution’s knowledge exhibits that in 2024, the overall world buying and selling quantity of stablecoins reached $27.6 trillion, even exceeding the mixed buying and selling quantity of Visa and Mastercard.
Pushed by the robust demand, the size of stablecoins is increasing quickly. As of mid – June this 12 months, the overall world market worth of stablecoins has exceeded $250 billion. The mainstream market expectation is extraordinarily astonishing. That’s, by 2035, the worldwide market scale of stablecoins shall be a minimum of $4 trillion, with a corresponding CAGR of up to 32%. The present US authorities expects that by the early 2030s, the market scale of stablecoins will attain $3.7 trillion, with a corresponding CAGR of even up to 80%.
Wanting on the forms of stablecoins, presently, the principle anchors of stablecoins are the US greenback and US Treasury bonds, and the size of gold – backed stablecoins remains to be very small. As of July this 12 months, the market values of PAXG cash and Tether Gold tokens, the 2 largest gold – backed stablecoins, had been solely $900 million and $800 million respectively. In the identical interval, the overall market values of USDT and USDC reached as excessive as $161 billion and $64 billion respectively. It may be seen that each the present scale and the lengthy – time period market expectation point out that there’s nonetheless enormous room for the expansion of gold – backed stablecoins.
From the angle of asset allocation, the core logic behind the market’s expectation of the continual enlargement of gold – backed stablecoins is that: in contrast with different forms of stablecoins, the core benefit of gold – backed stablecoins lies within the two attributes of shortage and inflation resistance of their anchor asset – gold.
The above two attributes of gold usually are not solely conducive to sustaining the lengthy – time period stability of the worth of gold – backed stablecoins but additionally present a sure operate of resisting systematic dangers for the purchasers of gold – backed stablecoins. Particularly at instances when there’s a want to launch danger – aversion demand, the secure worth of gold – backed stablecoins and the upward motion of the gold worth pushed by the enlargement of gold – backed stablecoins collectively type a double – insurance coverage for danger – aversion.
Chart: Complete market worth of main world stablecoins (Unit: $1 billion; as of July 2025). Supply: DefiLlama, 36Kr
Concerning the gold worth, because the buying and selling demand for gold – backed stablecoins continues to develop, its market scale will proceed to develop. Due to the truth that stablecoins are anchored to property at a hard and fast ratio, the development of the continual enlargement of gold – backed stablecoins will turn out to be one of many necessary forces supporting the lengthy – time period upward motion of the gold worth sooner or later.
Take Tether, the world’s largest stablecoin issuer, for example. The size of Tether Gold tokens issued by it has grown fairly quickly. The overall market worth in July this 12 months was about $800 million, and by October 16, it had elevated to about $1.6 billion, reaching a doubling progress in a brief interval. Extra notably, Tether mentioned in the course of this 12 months that it had established its personal impartial gold vault in Switzerland to retailer gold reserves value about $8 billion and deliberate to develop its gold reserves sooner or later.
Sooner or later, as your entire stablecoin market strikes in direction of a scale of trillions of {dollars}, Tether, because the business chief, and the Tether Gold tokens issued by it’s going to additionally profit from the primary – mover benefit. Contemplating the 1:1 anchoring relationship between Tether Gold tokens and bodily gold, then Tether’s gold reserves would be the key issue proscribing the size of its gold – backed stablecoins, and this logic additionally applies to different forms of gold – backed stablecoins.
Due to this fact, in opposition to the background of the lengthy – time period prosperity of the gold – backed stablecoin monitor, stablecoin issuers comparable to Tether even have the motivation to develop their very own gold reserves to address the speedy enlargement of gold – backed stablecoins. At present, there are market rumors that Tether buys 2 tons of bodily gold each week, which is equal to the month-to-month gold reserve buy quantity of the Individuals’s Financial institution of China.
Wanting on the gold worth lately, the continual and enormous – scale gold purchases by world central banks have step by step made the availability – demand relationship the core issue affecting the gold worth. Now, with stablecoin issuers becoming a member of the ranks of gold consumers, the pricing logic that the availability – demand relationship impacts the gold worth has been additional strengthened. In a way, gold is presently present process a spherical of “crypto – centric” evolution.
Optimistic concerning the lengthy – time period upward development of the gold worth
Concerning the latest sharp rise within the gold worth, particularly the truth that it refreshed its historic excessive through the intraday buying and selling on October 17, one necessary brief – time period issue is that the dangerous – debt issues disclosed by two US regional banks, Zions and Western Alliance, have nervous buyers, main to a pointy decline in US financial institution shares. Pushed by the chance – aversion sentiment, a considerable amount of funds have flocked to gold, serving to the gold worth to refresh its historic excessive once more. As well as to this brief – time period issue, all facets of things are fairly favorable for gold.
the way forward for the gold worth from the present pricing logic of gold, when it comes to provide and demand, central banks’ willingness to purchase gold remains to be robust and sustainable at current. Coupled with the continual gold purchases by stablecoin issuers to develop the size of gold – backed stablecoins, these two necessary lengthy – time period gold – shopping for forces have offered secure assist for the lengthy – time period upward motion of the gold worth.
The core logic behind central banks’ energetic and enormous – scale improve in gold holdings lies in danger – aversion. On the macro degree, lately, geopolitical conflicts and commerce frictions have occurred incessantly, repeatedly impacting the worldwide credit score system. On the identical time, the excessive degree of US debt has been tearing the credit score of the US greenback, and there are potential systematic dangers within the US greenback system.
Wanting again at historical past, the gold worth is normally negatively correlated with the credit score of the US greenback. Each spherical of steady weakening of the US greenback credit score has been adopted by a historic bull marketplace for gold. The continual de – globalization has clearly shaken the inspiration of the US greenback credit score. a key occasion that has broken the US greenback credit score not too long ago, that’s, the Fed’s curiosity – charge reduce in September. The market usually believes that Jerome Powell made a “cowardly curiosity – charge reduce” below coercion. Because the independence of the Fed is additional broken, the re – analysis of the US greenback credit score has additional elevated the allocation worth of gold.
Alternatively, the Fed has now entered an curiosity – charge reduce cycle. Based mostly on the historic rule that the gold worth is negatively correlated with the US greenback, the free expectation caused by the curiosity – charge reduce resonates with the core pricing logic that robust demand drives the upward motion of the gold worth. Coupled with the fermentation of the chance – aversion sentiment triggered by latest occasions comparable to commerce frictions and the sharp decline of US financial institution shares, below the dominance of the above elements, the gold worth has repeatedly refreshed its historic excessive not too long ago. From an extended – time period perspective, the continuity of the curiosity – charge reduce cycle will present steady and secure assist for the upward motion of the gold worth.
From the angle of capital, because the valuation of abroad know-how sectors represented by synthetic intelligence has reached a excessive degree, one attainable situation available in the market is that the know-how sectors will peak and modify, and the market’s danger – aversion demand will step by step unfold from the geopolitical finish to the buying and selling finish. With the chance – aversion asset attribute of gold itself and its distinguished lengthy – time period allocation worth, it’s anticipated to entice a portion of funds to movement in, thereby driving the gold worth to enter a brand new spherical of over – rising market.
Chart: Valuation of the Nasdaq Expertise Market – Cap Weighted Index. Supply: Wind, 36Kr
When it comes to security margin, though many establishments such because the Shanghai Gold Alternate, the Shanghai Futures Alternate, the Industrial and Industrial Financial institution of China, and the China Building Financial institution have issued danger warnings concerning the continual sharp rise of the gold worth, the most recent view of the World Gold Council exhibits that from a strategic perspective, the general gold holdings are nonetheless at a low degree, and the speculative positions and web lengthy positions within the futures market haven’t reached historic peaks, indicating that the market shouldn’t be saturated but, and gold nonetheless has steady attractiveness.
*Disclaimer:
The content material of this text solely represents the writer’s views.
The market is dangerous, and funding ought to be cautious. Beneath any circumstances, the knowledge on this article or the opinions expressed don’t represent funding recommendation to anybody. Earlier than investing determination, if mandatory, buyers should seek the advice of professionals and make choices rigorously. Now we have no intention of offering underwriting providers or any providers that require particular {qualifications} or licenses for the buying and selling events.
