Gold mining stocks experienced a significant uptick following news that Tether, the well-known stablecoin group, is planning to invest in the gold sector. This development marks a strategic move for Tether as it aims to diversify its investment portfolio beyond cryptocurrencies.
According to a report from the Financial Times, Tether intends to allocate its crypto profits towards gold-mining companies. The immediate market reaction saw Barrick Mining’s stock increase by 0.7%, while Newmont Mining rose by 0.6%. Additionally, the VanEck Gold Miners ETF also saw a rise of 0.65%.
Reports indicate that Tether is considering purchasing stakes in various gold mining firms. Earlier in June, the company made headlines by acquiring a $105 million minority stake in Elemental Altus, a gold royalty company listed on the Toronto Stock Exchange. Furthermore, Tether has been in discussions with several mining and investment groups regarding potential investments throughout the entire gold supply chain, though not all conversations have resulted in tangible agreements.
The motive behind Tether’s potential investments seems two-fold: to mitigate its exposure to the volatile cryptocurrency market and to benefit from gold’s reputation as a traditional safe-haven asset. Tether’s CEO, Paolo Ardoino, has expressed his views on gold, referring to it as the “natural Bitcoin,” highlighting its enduring value.
Financially, Tether is in a strong position to make these investments, having reported a profit of $5.7 billion in the first half of this year. Analysts believe that should Tether proceed with investing in gold, other stablecoin issuers may follow suit, potentially reshaping the investment landscape for both cryptocurrencies and traditional assets.
For gold mining stocks, this potential influx of investment could serve as an additional boost in what has already been a strong year. Recently, stocks have benefitted from record gold prices, which have surged due to investor concerns about economic and geopolitical instability. The gold price has recently crossed $3,500 an ounce for the first time, with some predictions suggesting it could rise to $5,000 an ounce. Factors influencing these forecasts include ongoing volatility in the markets and expectations of forthcoming interest rate cuts, alongside political influences on monetary policy.
As the market watches these developments closely, investors are keen to identify which gold mining ETFs may be worth considering. Various resources, including investment comparison tools, are being used to navigate the best options in the gold mining sector.
