XAUT and PAXG Surge as Gold Price Breaks $4,800 and Eyes $5,000
The unprecedented 70% surge in gold prices over the past year, marking its strongest performance since the mid-1970s, has triggered a significant increase in demand for investments tied to the precious metal.
Amid growing geopolitical tensions and fresh tariff threats, institutional and retail investors alike have sought safe havens, and one particular sector has stood out – tokenized gold.
According to a report by crypto exchange CEX.io, gold-backed tokens such as XAUT ($4,851.70) and Paxos Gold (PAXG) experienced exponential growth last year, surpassing the trading volume of most traditional gold exchange-traded funds (ETFs).
In 2025 alone, tokenized gold trading reached an astounding $178 billion, with $126 billion recorded in the last quarter of the year.
Volume Comparison between Tokenized Gold and Traditional ETFs
If tokenized gold were an ETF, it would already rank as the second-largest by trading volume, surpassing all but one U.S.-listed ETF – the SPDR Gold Shares (GLD), which manages $165 billion in assets.
While the sector is dominated by a single player – Tether‘s XAUT, which accounted for 75% of fourth-quarter volume – its market capitalization has increased substantially. The report notes a 177% surge, putting it at over $4.4 billion, although this remains minuscule compared to the total gold market’s colossal $32 trillion value.
Biggest tokenized gold coins by market cap (Source: CoinGecko)
Retail demand is a primary driving force behind tokenized gold due to its accessibility. Unlike some tokenized assets limited to accredited investors, gold tokens offer fractional ownership and do not require minimum investments for individual investors.
That broader accessibility, particularly in emerging markets where gold-linked investment products may be scarce, has propelled the growth of this niche market.
With gold breaking through $4,800 today, up nearly 10% since the beginning of the year, Gracy Chen, CEO at crypto exchange Bitget, sees the metal targeting $5,000.
“With tariffs back in focus,” she says, “capital is likely to rotate toward defensive assets, where gold remains dominant. As for the outlook, we see gold heading towards the $5,000 level. If current conditions hold, it’s not far away.”
