💰 Smart Money Flow Type: Where did the money go? The world's largest "money printer" is currently consuming 2 tons of gold every week. Will this "central bank-level" operation trigger a surge in gold prices or just pave the way for $BTC?

🤔 Strange! Everyone is watching the Federal Reserve’s interest rate decision and the $BTC ETF fund flows, but they overlook the world’s largest dollar “shadow central bank,” which is using real gold to play a grand game about the ultimate wealth shelter.

Deep inside a highly secure vault in Zurich, Switzerland, robotic arms are transferring standard gold bars from traders’ trays to a dedicated tray marked with a “T” letter. This is not a Hollywood movie scene, but a real weekly performance over the past year. The giant issuer of approximately 186 billion USD in stablecoins is continuously absorbing physical gold at a rate of 1 to 2 tons per week.

Market analysis indicates that the leader of this stablecoin issuer recently publicly stated plans to increase the allocation of gold in its massive reserves from about 7% to a systematic range of 10% to 15%. He calls this a “reasonable” allocation, placing gold alongside U.S. Treasuries and $BTC as core reserve assets.

This adjustment is not just on paper. According to recent disclosures, the company currently holds about 130 to 140 tons of physical gold, with a market value between 23 and 24 billion USD. Amid gold prices once surpassing $5,000 per ounce, gold’s share in its assets has reached 12% to 13%, approaching the lower end of its target range. Based on its total assets and retained earnings, future additional purchases could amount to several billion dollars.

From a market mechanism perspective, this buying activity’s direct impact almost entirely affects demand. Global gold supply is short-term inelastic, with annual mine production around 3500 to 3600 tons and recycled gold supply about 1200 to 1500 tons, unable to respond quickly to sudden demand surges. Therefore, these gold holdings mainly come from OTC markets and existing above-ground inventories at Swiss refineries, not from futures exchanges.

Converting the purchase volume to an annualized 50 to 100 tons equates to about 1% to 2% of global annual supply. While this scale alone is insufficient to dominate the market, it can produce a noticeable marginal impact. Its primary effect is tightening physical liquidity—these bought gold is stored directly in vaults rather than held as paper contracts, reducing the amount of gold available for immediate delivery in the market.

When central banks or large ETFs simultaneously show strong buying demand, this liquidity tightening can amplify price volatility, narrowing bid-ask spreads, and making gold prices more sensitive to incremental buying. However, in terms of price movement, this influence is more supportive than explosive. The weekly purchase of 1 to 2 tons, relative to the global gold market, especially daily futures trading volumes, is a tiny proportion.

But this type of purchase has predictable, balance sheet-driven, and cumulative effects, acting like a cushion beneath the market, helping to reinforce the bottom support for gold prices. Isolated, such structural capital inflows could, under certain conditions (e.g., a weakening dollar or rising geopolitical risks), push gold prices short-term by 1% to 3%.

Perhaps more important than direct purchases are the expectations they convey. The company’s leadership has repeatedly described gold as a “central bank-level reserve asset,” a statement that resonates easily in the current environment where global central banks buy over 1000 tons of gold annually. A large, relatively transparent buyer continuously entering the market further strengthens the narrative of gold as a hedge against fiat currency credit risk and political uncertainty. This signal may attract more investors to follow suit, causing price fluctuations to exceed what their direct purchases alone could explain.

Nevertheless, its influence has clear boundaries. Even reaching its upper target, its gold reserves cannot alter the long-term supply curve of gold, and its total scale cannot compare to the combined purchasing power of sovereign central banks and global gold ETFs. The core forces determining long-term gold prices remain the Federal Reserve’s monetary policy path, the strength of the dollar index, and the overall risk appetite in global markets.

Therefore, the key conclusion is: this gold-buying activity adds a new, ongoing structural demand source to the gold market. It short-term tightens physical gold availability and marginally supports gold prices. But fundamentally, it acts as a “stabilizer” rather than a “game-changer.” Its role is to reinforce and confirm an already existing bullish macro backdrop, rather than triggering a meteoric rise in gold prices out of thin air.