Three-tier gold rally: central banks, ETFs and crypto

Gold demand has expanded in three sequential buyer groups: sovereign reserve purchases, renewed Western investor flows and crypto-native demand products. Each phase added physical or paper demand while earlier buyers remained active.

From 2022 through 2024 central banks increased holdings at a pace above 1,000 tonnes per year. That accumulation continued even as bullion prices rose. World Gold Council data show official net purchases moderated to 863 tonnes in 2025. Some jurisdictions did not disclose purchases; Poland was a disclosed leader among national buyers in 2025.

Western institutional and private investors began to re-engage in 2025. Global gold ETF holdings increased by roughly 801 tonnes that year and total annual gold demand exceeded 5,000 tonnes. Sales of bars and coins reached multi-year highs in several regions. U.S. private portfolios held gold-equivalent ETF positions equal to about 0.17% of private financial assets, compared with typical institutional allocations in the 1–2% range.

Analysts estimate that moving U.S. private allocations toward a conservative 0.5% would imply incremental ETF demand in the range of about 1,500 to 2,000 tonnes, calculated without assuming additional buyer categories.

Crypto-native channels added a separate source of demand via stablecoin reserve allocations and tokenized gold products. Tether’s USDT reserve pool totaled about $190 billion in 2025, with an estimated allocation to gold near 10%, or roughly $19–20 billion. Reported 2025 purchases placed Tether among the largest institutional gold buyers that year, exceeded by only a small number of central banks.

Tokenized gold-digital tokens backed 1:1 by allocated physical bullion held in audited vaults-grew to a market of about $6 billion with approximately 35–40 tonnes outstanding in early 2026. The total supply of tokenized gold approximately doubled in the previous six months. These tokens can be used as on-chain collateral for lending, margin and settlement, reducing the custody steps tied to moving physical metal.

New yield-bearing tokenized structures combine tokenized gold with derivatives and lending. Managers hedge price exposure with short futures while seeking income from positive futures roll in contango and from lending tokenized positions. These structures introduce additional operational and counterparty risks. A series of decentralized finance exploits in 2025 and 2026 coincided with limited adoption beyond crypto-native users.

U.S. legislation passed in May 2026 requires compliant stablecoins issued to U.S. users to be backed only by U.S. dollar cash, short-dated Treasury securities or Federal Reserve balances, excluding gold and other non-USD assets. Tether is incorporated offshore and is not subject to that U.S. requirement.

Central-bank reserve buying remained active while ETF and private flows returned in 2025 and crypto-related demand expanded from a low base. The three buyer groups operated on different timelines and used distinct mechanisms to add to physical and paper gold demand.