Investors Flock to Digital Gold as Uncertainty Drives $2.5B Surge

The tokenized gold market has surged to an all-time high of $2.57 billion, driven by strong inflows into leading products such as Tether's XAUT and Paxos' PAXG. This growth reflects renewed investor interest in gold-backed tokens amid rising gold prices and ongoing market uncertainties, according to data from CoinGecko and DefiLlama. The market capitalization milestone was achieved as both tokens experienced substantial increases in supply and market value over the past few months [1].

Tether’s XAUT token, which is minted on the Ethereum network and represents one troy ounce of gold, saw a significant jump in supply in early August. The firm behind the USDT stablecoin minted 129,000 XAUT tokens during the period, adding $437 million in value and pushing the token's total supply to $1.3 billion. This development underscores growing demand for a digital alternative to physical gold, particularly among institutional and retail investors seeking exposure to the precious metal without logistical complexities [1].

Meanwhile, Paxos’ PAXG token, another gold-backed digital asset, also reached a record market size of $983 million. The token has attracted $141.5 million in net inflows since June, reflecting a steady increase in adoption and confidence in tokenized gold as a store of value. PAXG, like XAUT, is backed by physical gold bars stored in secure vaults, offering investors a transparent and liquid means to access gold’s price movements [1].

The recent surge in tokenized gold demand coincides with a broader upward trend in physical gold prices. Gold currently trades near $3,470 per ounce, approaching its April 22 peak, which was driven by investor concerns over potential trade disruptions. The precious metal is widely regarded as a safe-haven asset, particularly during periods of macroeconomic volatility. Analysts note that the steepening U.S. Treasury yield curve has further fueled demand for gold as investors hedge against inflation and geopolitical risks [1].

The growth of the tokenized gold market highlights the evolving landscape of digital asset investments. As institutional investors and fintech platforms continue to explore innovative ways to digitize traditional assets, tokenized gold offers a compelling use case for blending physical commodities with blockchain technology. The market’s expansion also reflects broader market dynamics, with gold-backed tokens offering a more accessible, liquid, and transparent alternative to traditional gold investments [1].

Source:

[1] Tokenized Gold Market Tops $2.5B as the Precious Metal Nears Record Highs (https://www.coindesk.com/markets/2025/09/01/tokenized-gold-market-tops-usd2-5b-as-the-precious-metal-nears-record-highs)

[2] The Market Capitalization of Tokenized Gold Has Exceeded (https://www.gate.com/th/post/status/13453932)