Has the gold pattern changed? The Central Bank of Russia sells physical gold for the first time to "make up for the budget," while the "stablecoin leader" hoards gold nearing the scale of small central banks

The gold market is undergoing a historic restructuring. Russia, the fifth largest gold reserve country in the world, has confirmed for the first time that it is selling physical gold to make up for the national budget, while Tether, the largest stablecoin issuer in the cryptocurrency space, has rapidly emerged as the world's largest non-sovereign gold holder, with its gold hoarding scale comparable to that of small central banks.

On November 21, according to Xinhua News Agency, the Central Bank of Russia confirmed to the Russian International News Agency on the 20th that it has begun selling its reserve of physical gold to raise funds needed for the national budget. This is the first time that this country, which holds over 2,300 tons of gold reserves, has taken such action. The Central Bank of Russia did not disclose the specific timing or scale of the physical gold sales.

Meanwhile, investment bank Jefferies pointed out in its latest report that "stablecoin leader" Tether has become an important new buyer driving the surge in gold prices. As of the end of the third quarter, the stablecoin issuer held at least 116 tons of gold, having increased its holdings by about 26 tons in the third quarter alone, equivalent to about 2% of global demand.

This shift in the buying and selling pattern of the gold market comes at a time when gold prices are soaring. Since the beginning of this year, gold prices have risen by more than 50%, with the current spot gold price around $4,040 per ounce.

Sales Under Pressure from Sanctions on the Central Bank of Russia

The decision by Russia to sell its gold reserves highlights the ongoing pressure of Western sanctions on its finances.

According to Xinhua News Agency citing Russian news agencies, since the escalation of the Ukraine crisis in February 2022, the European Union and the G7 have frozen nearly half of Russia's foreign exchange reserves, totaling about €300 billion, of which approximately €200 billion is in accounts such as those at the European Clearing Bank.

As the world's second-largest gold producer, Russia mines over 300 tons of gold each year. However, Bloomberg data shows that since 2022, Russian gold bars have been banned from entering Western markets, and the London Bullion Market Association no longer accepts Russian gold.

To address this situation, Russia has eliminated the value-added tax on retail gold purchases to stimulate domestic demand and help sanctioned mining companies find alternative export solutions.

Bloomberg reported on October 29, citing survey results, that gold has become one of the most favored savings methods among Russians over the past four years, with retail gold purchases, including gold bars, coins, and jewelry, expected to reach 62.2 tons this year, equivalent to the national reserves of Spain or Austria.

Dmitry Kazakov, an analyst at BCS Global Markets in Moscow, stated that following the imposition of related sanctions, the convenience of using Western currencies for savings has decreased, leading to an increase in demand for gold since 2022

The Gold Ambitions of Stablecoin Giants

Tether is rapidly becoming an important force in the gold market. Jefferies stated in its latest report that certified data and on-chain activities show that the stablecoin issuer has been hoarding gold in large quantities in recent months, tightening supply and driving a significant increase in gold prices.

The report pointed out that Jefferies analysts first noticed Tether's interest after the company met with mining and royalty companies in Denver last fall, when investors informed Jefferies that Tether planned to purchase about 100 tons of gold this year.

Meanwhile, Tether CEO Paolo Ardoino's public statements about increasing gold in reserves, along with the subsequent surge in price to $1,000 per ounce, further corroborated this assessment.

According to a previous article from Wall Street Insight, Tether, the world's largest stablecoin issuer, has an exclusive vault in Switzerland, storing gold reserves worth approximately $8 billion, making it one of the largest holders of gold globally outside of banks and national institutions.

Jefferies analysts, including Andrew Moss, estimated in the report that Tether held at least 116 tons of gold at the end of the third quarter, with 12 tons backing its XAUt token (valued at approximately $1.57 billion) and about 104 tons backing USDT (valued at approximately $13.67 billion), making it the largest non-sovereign holder of gold, comparable to the gold holdings of small central banks. According to CoinMarketCap data, XAUt currently has a market capitalization of about $1.5 billion.

Most notably, Tether's pace of gold accumulation—about 26 tons added in just the third quarter—represents approximately 2% of global demand. Jefferies noted that while this is not enough to overwhelm central bank capital flows, such purchases may have tightened recent supply and boosted bullish sentiment.

Jefferies stated in the report that as USDT grows and gold maintains a reserve ratio of about 7%, Tether is expected to continue increasing its holdings. Paolo Ardoino anticipates profits will reach $15 billion by 2025, and the bank's analysts calculated that even if half of that is invested in gold, it could add nearly 60 tons annually.

Jefferies analysts also mentioned Tether's expanding investments across the entire gold ecosystem, including over $300 million invested in royalty and streaming companies this year.

The bank believes that these equity investments are further evidence of a broader metals strategy. The recent hiring of two top metal traders from HSBC indicates that Tether's push into gold is accelerating rather than slowing down.

However, the report also noted that Tether plans to launch a stablecoin, USAT, compliant with the GENIUS Act, which does not require gold reserves, introducing uncertainty regarding the long-term impact on USDT and gold demand