Tether, the stablecoin giant, has moderated its expansion in the gold market but continues to build its reserves. According to its latest quarterly report, the company added over 6 metric tons of gold to its reserves in the first quarter, a significant slowdown compared to the more than 21 metric tons added in the previous quarter. As of the end of March, the market value of its gold holdings reached $19.8 billion, equivalent to approximately 132 metric tons, approaching the $20 billion threshold. Concurrently, two senior precious metals traders, who were hired with much fanfare from HSBC several months ago, left the company in March. This departure has led to the stalling of Tether's ambitious plan to build the "world's best gold trading desk."
Despite the slower pace of gold purchases, Tether remains a significant buyer in the global gold market. Greg Shearer, Head of Precious Metals Research at JPMorgan, stated that Tether's gold-buying activities have had a "material impact" on gold price trends. He noted that the company's total gold purchases last year were second only to the National Bank of Poland and exceeded those of all other central banks.
**Reserve Scale: 132 Metric Tons, Nearing Top 20 Central Banks** Tether's Q1 report shows that, as of the end of March 2026, the market value of gold holdings backing its USDT stablecoin was $19.8 billion. Based on the spot price at the time, this equates to roughly 132 metric tons, an increase from the 126 metric tons held at the end of December 2025. Tether manages two products involving gold reserves: USDT, the world's largest USD-pegged stablecoin with a circulation of approximately $1.895 trillion, and the gold-backed token XAUT, with a circulation of about $3.3 billion that is 100% backed by physical gold. The gold holdings corresponding specifically to XAUT currently stand at 22 metric tons, an increase of 6 metric tons since the end of last December. Combined, Tether's products are backed by approximately 154 metric tons of gold. If considered a sovereign nation, this reserve size would place it within the top 20 globally, just below Brazil, which holds 172 metric tons.
It is important to note that these figures represent only the disclosed portion. Media reports citing Tether CEO Paolo Ardoino from January indicated the company plans to allocate 10% to 15% of its own $20 billion investment portfolio to physical gold. This suggests Tether's actual total gold holdings may significantly exceed the publicly reported data. Despite the substantial gold holdings, they still represent a relatively limited portion of the total USDT reserves. As of the end of Q1, U.S. Treasury bills dominated the reserve assets backing USDT at $1.17 trillion, with gold comprising about 10% and Bitcoin holdings around $7 billion.
Tether's business model involves users exchanging dollars for USDT, after which Tether invests the received dollars into assets like Treasury bills, gold, and Bitcoin, earning profits from the interest rate spread and investment returns. The financial report also revealed Tether's net profit slightly exceeded $1 billion in the first quarter, following a full-year 2025 net profit of over $10 billion.
**Slower Purchases: Trader Departures Halt "Best Trading Desk" Plan** The sharp decline in Tether's Q1 gold purchases, from over 21 metric tons last quarter to about 6 metric tons, follows a strategic shift triggered by personnel changes. Media reports stated that Tether had specifically recruited two senior precious metals traders from HSBC months earlier, announcing plans to create the "world's best gold trading desk" and actively manage its own gold investment portfolio. However, these traders departed in March of this year. Regarding this personnel change, Tether stated the company is "always committed to operating with a lean team" and will leverage the professional expertise accumulated through recent investments in the gold industry. According to media reports citing four informed sources, the arrangement failed due to organizational constraints from the supervisory structure above the traders, which was "fundamentally unworkable."
In this context, Tether has pivoted towards gaining exposure to the gold industry chain through equity investments. It was reported that the company took a stake in U.S. precious metals dealer Gold.com Inc. in February; the dealer possesses substantial trading and logistics operations. Furthermore, despite the slower pace in the first quarter, Tether's presence in the gold market remains significant. JPMorgan's Greg Shearer, commenting before the release of Tether's latest quarterly report, emphasized that Tether's gold-buying has a "material impact" on global gold prices. He pointed out that Tether's total gold purchases last year surpassed those of every central bank except Poland's.
The first quarter saw considerable volatility in the gold market. Gold prices surged to near a historic high of $5,600 per ounce in January, followed by several significant corrections. The outbreak of war between the US and Iran served as the most recent trigger for a sell-off. Against this backdrop of high market uncertainty, Tether's decision to slow its gold purchasing pace may also be related to the turbulent market environment.
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