Tether’s XAUT Surges 3.4% Amid Flat Crypto Market, Gold Prices Hit $3,200

Tether’s XAUT, a tokenized gold asset, has emerged as the top-performing digital asset, with a 3.4% increase in the last 24 hours. This surge comes amidst a relatively flat crypto market, where the CoinDesk 20 index, tracking the largest digital assets, has seen a 2% decline. The broader tokenized gold sector has also experienced a 4.3% increase during the same period.

Physical gold prices have reached unprecedented levels, trading above $3,200 in Hong Kong after breaching all-time highs during U.S. trading hours. This surge in gold prices is on track for a roughly 5.5% weekly gain as global investors seek the traditional safe haven asset. Gold typically rallies during periods of economic or geopolitical uncertainty, as it is viewed as a reliable store of value during volatile market conditions.

Despite some de-escalation in trade tensions, investors remain concerned about unpredictable policy from the White House. The precious metal also benefits from its inverse relationship with interest rates. When rates are lower, the opportunity cost of holding non-yielding gold decreases, making it more attractive to investors.

A major factor driving gold’s rally is growing concern about the U.S. budget deficit. Halfway through fiscal year 2025, the deficit has increased by $1.3 trillion, putting it on pace for $2.6 trillion annually—approximately 9% of GDP. The independence of the Federal Reserve is also under scrutiny, with fears that President Trump could fire Fed Chair Jerome Powell, creating further instability in financial markets.

U.S. inflation data showed some cooling in March, with the Consumer Price Index rising 0.1%, putting the 12-month inflation rate at 2.4%, down from 2.8% in February. Despite this, traders are pricing in three or four interest rate cuts by the end of the year, which could further support gold prices.

The escalating U.S.-China trade war continues to create market anxiety. The White House confirmed that President Trump has hiked tariffs on Chinese goods to 145%. China promptly retaliated with 84% tariffs on U.S. imports and has been strengthening ties with Europe and Asia to ease economic pressure.

Asian equity markets showed mixed performance in response to these developments. Meanwhile, China’s state media has reported that stimulus measures are in the works, including interest rate cuts and government spending of approximately $136 billion.

Technical analysis suggests gold prices may continue their upward trend. The 14-day Relative Strength Index is approaching the overbought region at 70, indicating there may still be room for growth before buyer exhaustion sets in. The immediate resistance level is seen at $3,250, with potential for movement toward $3,300 if momentum continues.