For many decades, it has been reasonably easy to determine why the price of gold has increased. Everyone knows gold has been an inflation source and if someone lives in an economy which collapses, having physical assets such as gold is very helpful in getting out of the country and starting in a new one. Gold is seen in jewelry, coins and central banks own it, but there is a new player.

In an article by Mike Dolan of Reuters, there are many analysts who search the world to determine who is buying the gold? Until recently the focus was on central bank managers in China and the developing world. Add to that sizable private buying and strong inflows into exchanged-traded gold funds, and there’s the familiar flight to safety narrative.

Another buyer is Tether, the issuer of the US dollar-pegged crypto token or stablecoin USDT and smaller gold-backed token Tether Gold XAUt.

Investment bank Jefferies calculates gold buying from what’s now the world’s largest digital assets company exceeded official central bank purchases over 2 quarters through September 30.

Tether owns 116 tons of gold for its customers – about $14 billion. That made it the largest single holder of bullion outside the big central banks.

Gold’s price rose in 2 waves this year: the first was a $1,000 per ounce jump in 4 months tied to the tariff shock and a 10% drop in the US dollar. The second was a $1,000 per ounce jump without the normal rational reasons as well as the dollar did not decline.

Central banks bought 220 tons in both the 2nd and 3rd quarters.

Jefferies notes Tether bought 26 tons in the 3rd quarter or 2% of the gold demand. In the 2nd quarter Tether accounted for 14% of central-bank buying.

At last count, Tether reported holding 104 tons of gold as part of USDT’s reserves and another 12 tons backing XAUt.

Linking to dividend paying stocks, in every industry as an investor you make some basic assumptions on the reasons why the stock goes up and down. If you own investments in resources, if a new discovery is made, if it can be taken out of the ground and refined and sold at current prices, then can expect a good return. But what is driving the price of the resource? We make assumptions because they have worked in the past, then something new happens and you need to examine the assumptions. For your investments, what assumptions are you making?

There are more questions than answers, till the next time – to raising questions.