We are seeing notable activity in the options market on COMEX, the US futures exchange. Several investors have been purchasing call options with strike prices of $10 000 an ounce, expiring in December 2026. In other words, they are buying financial derivatives that would pay off if gold were to reach — or exceed — that level. This does not mean gold is heading to $10 000 /oz. However, it does indicate that some investors are willing to pay a premium for exposure to extreme upside scenarios. We have even observed open interest in contracts structured to benefit if gold were to trade in a $15 000 to $20 000 range. These positions are relatively inexpensive — effectively “lottery tickets” in the derivatives market — but they show that at least some participants see the possibility of substantially higher prices. We would not comment on the probability of such outcomes. Those levels would far exceed what we would typically expect gold to deliver in a single year. That said, given the extraordinary price performance of the past few years, I have learned to be cautious about dismissing any scenario outright,” notes Reade. High gold prices reshaping the global economy? So, what has been the key driver for the sharp rise in gold prices over the recent past? Reade points to growing investor anxiety regarding the outlook for the US dollar and the US Treasury market. While higher gold prices benefit certain parts of the global economy, they also reflect broader concerns about risk and uncertainty in financial markets. In that sense, it’s both good news and bad news.
“Tether is a US dollar-pegged stablecoin issuer with multiple tokens. Its largest product is a dollar-backed stablecoin supported by roughly $180 billion in assets. Tether has significantly increased its exposure to gold within the reserves backing its dollar stablecoin. It has benefited from the recent rise in gold prices and appears to be taking a more strategic approach to the metal. The firm has reportedly hired two senior gold traders from HSBC, one of the world’s leading bullion banks, and is said to be in discussions with various participants across the gold market,” explains Reade. He adds that with the stablecoin business approaching $200 billion in scale, Tether represents a meaningful financial force. “Its leadership is reportedly extremely bullish on gold and increasingly cautious about the medium-term outlook for the U.S. dollar. As a result, Tether has become an interesting and potentially influential player in the gold market. If it continues accumulating gold, its impact could grow significantly. While exact figures are not publicly confirmed, estimates suggest Tether purchased around 100 tonnes of gold last year. In the context of a roughly 5 000-tonne annual global gold market, that represents a relatively small share — but it is still a notable and supportive source of demand.” Could gold potentially reach $10 000 /oz in the short-to- medium term? “My experience of the past two years has taught me not to rule anything out when it comes to gold’s upside potential.
“Many investors — most of whom invest in a range of assets alongside gold — remain concerned about the overall health and prospects of the global economy.” However, while gold is a small component of the global economy, it remains an important one, with countries that produce and export large quantities gold benefiting from the increased foreign exchange earnings, and the companies that mine gold, performing extremely well financially. In South Africa, for example, high gold and commodity prices have helped bolster the local economy in 2025/2026, serving as a “golden lifeline” that has plugged budget gaps, improved tax revenues, and helped stabilise public debt. Surging gold prices—hovering near record highs of over $4 800–$5 000/ oz—combined with strong PGM prices, boosted mining tax collections by over 29% as of December 2025. More broadly, however, elevated gold prices have had limited negative consequences for the global economy, although effects have been felt in gold- producing countries, where higher prices
Who Buys Gold? • The largest sources of gold demand remain: • Central banks • Private investors (primarily bars and coins) • The jewellery sector – particularly in China and India • Exchange-traded funds (ETFs)
April 2026 | www.modernminingmagazine.co.za MODERN MINING 11
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