Gold Surges 50% in 2025, Largest Rally in Decades
Gold prices have surged to unprecedented levels, with a 50% increase since the start of 2025. This is the largest rise in the precious metal since the 1970s. Meanwhile, major cryptocurrencies have lagged behind.
The price of gold has climbed by $300 since early September, reaching nearly $3,700 per troy ounce. This rally has been fuelled by various factors. The Federal Reserve's interest rate cuts have played a significant role. Additionally, investors have been driven by 'Fear of Missing Out' (FOMO), leading to increased gold allocation in portfolios, similar to tech stock rallies.
Tether, the company behind the stablecoin USDT, has also contributed to gold's rise. Tether's gold position increased from $6.7 billion in Q1 to $8.7 billion, potentially supporting gold prices. However, there's no evidence that Tether invested in gold mining companies or engaged in gold royalty management negotiations in the second quarter of 2025. Nevertheless, Tether has started exploring these areas.
The premium on Chinese gold has fallen into negative territory, indicating strong Western-driven physical demand. North American ETFs have registered net inflows of 50 tons in the last two weeks, further supporting gold's rally.
Gold's remarkable rally, the largest in over four decades, has been driven by a combination of factors, including central bank policies, investor sentiment, and increased demand. While Tether's involvement is notable, its extent and impact remain uncertain. Meanwhile, concerns about US institutional integrity have been raised due to President Trump's attacks on the Fed.
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