Gold-backed cryptocurrencies experienced a significant pullback from their all-time highs today, with leading tokens PAXG and XAUT dropping over 4% amid widespread market turbulence triggered by President Trump’s newly announced global tariffs.
Gold-Backed Tokens Hit Record Highs Before Retreat
Paxos Gold (PAXG) and Tether Gold (XAUT) initially surged to unprecedented levels, with PAXG reaching $3,191 and XAUT touching $3,190, exceeding spot gold’s peak of $3,167. However, the rally proved short-lived as broader market pressures forced a retreat.
The dramatic reversal came as recession fears intensified following Trump’s tariff announcement, which triggered a massive $2.5 trillion sell-off in U.S. equities.
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Market Impact and Technical Analysis
Current price levels show PAXG trading at $3,074 and XAUT at $3,064, closely tracking gold’s spot price of $3,038 per ounce. Despite the recent pullback, gold-backed tokens maintain a robust 17% gain year-to-date, supported by:
- Federal Reserve interest rate cuts
- Strong Asian market demand
- Significant central bank accumulation
Central Bank Buying Supports Long-term Outlook
February saw continued institutional interest in gold, with central banks adding 24 metric tons to their reserves. Notable purchases include:
- Poland: 29 tons (total reserves now 480 tons)
- China: Continued accumulation
- Turkey, Jordan, and Qatar: Increased holdings
FAQ Section
What caused the gold-backed token sell-off?
The sell-off was primarily triggered by Trump’s tariff announcement and subsequent equity market losses, forcing investors to liquidate safer assets to cover margin calls.
Are gold-backed tokens still a good investment?
Despite recent volatility, gold-backed tokens remain up 17% YTD and continue to serve as a digital alternative to physical gold investment.
How do gold-backed tokens compare to physical gold?
Gold-backed tokens offer easier trading, storage, and transfer capabilities while maintaining a 1:1 backing with physical gold stored in secure vaults.