Tether, based in El Salvador, has announced the termination of the services of two senior precious metals traders who were appointed by HSBC three months ago. This decision comes amid a significant decline in gold prices, which has affected the company's strategies. Gold prices have seen a substantial drop, leading to pressures on interest rate reduction expectations and rising energy costs amidst the tense situation in Iran.
Informed sources reported that Tether ended the traders' services after having invested in them as part of its strategy to support its gold investments. Tether owned approximately 130 metric tons of gold as backing for its products until the end of 2025, and the company's CEO, Paolo Ardoino, stated last January that the company plans to allocate 10% to 15% of its investment portfolio to gold.
Details of the Event
The services of the two traders were terminated this month, with one of them indicating on his LinkedIn profile that his position was eliminated. Tether has not responded to media requests for comments regarding this decision. The news was first reported by Bloomberg.
It is noteworthy that gold prices experienced a significant increase of 64% in 2025, reaching a record level of $5,595 per ounce in January, driven by speculative demand. However, gold has since declined by 18%, with prices dropping by 13% so far in March to $4,579, reflecting high market volatility.
Background & Context
Gold is considered a safe asset that investors turn to during economic crises. Historically, gold prices have experienced significant fluctuations influenced by various factors, including monetary policies and geopolitical tensions. In recent years, the importance of gold as a safe haven has increased amid global financial and economic crises.
Tether was founded in 2014 and is known for offering a stablecoin pegged to the US dollar. With the growing interest in digital currencies, Tether seeks to diversify its investments, including its investment in gold, reflecting the general trend towards traditional assets amid sharp fluctuations in financial markets.
Impact & Consequences
The termination of the traders' services at Tether may indicate a reassessment of the company's strategies in light of current economic conditions. The decline in gold prices could affect the company's expansion plans and may force it to review its investments in precious metals.
This decision may also have broader implications for the gold market, potentially leading to further price pressures if current trends continue. Investors in the market should be cautious of potential volatility, especially amid tense geopolitical conditions.
Regional Significance
In the Arab region, gold is considered an important asset widely traded. Arab countries, especially those in the Gulf, heavily rely on gold as a means of wealth protection. The decline in gold prices could impact individual and corporate investments in the region, necessitating a reassessment of investment strategies.
In conclusion, these developments highlight the importance of monitoring global financial markets and their impact on local investments, especially amid the rapid changes occurring in the markets.