Gold mining stocks were shinier today after reports that stablecoin group Tether was set to invest in the “natural bitcoin” sector.
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Investment Talks
According to a report in the Financial Times, Tether plans to invest its crypto profits into gold-mining firms to diversify its portfolio. Barrick Mining (B) stock was 0.7% higher with Newmont Mining (NEM) up 0.6% and the VanEck Gold Miners ETF (GDX) up 0.65%.
Indeed, Tether is looking, said the report, into buying stakes in gold mining firms. Back in June, it paid $105 million for a minority stake in Toronto-listed gold royalty company Elemental Altus.
Tether has reportedly discussed investing in the entire gold supply chain with mining and investment groups. Tether also held talks with multiple gold royalty companies and Terranova Resources, though the latter didn’t result in a deal.
The thinking behind the move could be to reduce its risk exposure to the highly volatile cryptocurrency market, but also get exposed to the traditional stable safe haven offered by gold.
Golden Boost
The admiration of the precious metal goes to the top of Tether with its chief executive Paolo Ardoino describing gold as the natural Bitcoin.
Tether reported a $5.7 billion profit in the first half of the year, so it has the cash to invest. Analysts believe that if it does take up golden stakes then other stablecoin issuers might follow its lead.
For gold mining stocks, it could be another boost in an already impressive year. Stocks have been helped by record gold prices driven by investors spooked by economic and geopolitical volatility.
The price is now hovering around $3,500 an ounce for the first time ever and some forecasts predict that it could go even higher to $5,000 an ounce. That’s because of continued volatility but also prospects of lower interest rate cuts ahead. President Trump’s interference with the Fed is seen as another feather in the golden cap.
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