Tokenized Gold Market Breaks $4 B Milestone as Spot Prices Near $5,000/oz
On‑chain gold tokens Tether Gold (XAUT) and Paxos Gold (PAXG) together account for the bulk of a rapidly expanding tokenized‑commodity sector, while physical gold prices climb toward a new all‑time high.
Market overview
- Combined market cap: The two leading on‑chain gold tokens now exceed $4 billion in total value. XAUT holds roughly $2.5 billion in assets, and PAXG is close behind with about $1.99 billion, according to DeFiLlama metrics.
- Share of the market: Together, XAUT and PAXG control roughly 86 % of the tokenized‑commodities ecosystem, which RWA.xyz estimates at $4.88 billion—a 22 % rise over the past month.
- Trading activity: In the past 24 hours, PAXG recorded about $533 million in volume, while XAUT generated roughly $266 million, per CoinGecko data.
- Physical gold price: Spot gold closed Friday at ~$4,986 per ounce, up 1.6 % on the day, inching toward the psychologically important $5,000 level.
Why the surge?
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Safe‑haven demand amid volatility – Recent turbulence in broader crypto markets has renewed interest in traditional stores of value. Bitcoin, for instance, is hovering around $90,750, modestly higher on the day but still down 4 % week‑over‑week and 14 % year‑to‑date. The contrast has nudged investors toward assets perceived as less correlated with digital‑currency price swings.
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On‑chain accessibility – Tokenized gold offers a bridge between the familiar security of physical bullion and the efficiency of blockchain. Traders can move, settle, and collateralize gold‑backed tokens instantly, a convenience not available with physical bars or certificates.
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Institutional endorsement – Large banks have begun to upgrade their outlook on gold. Goldman Sachs, for example, recently lifted its year‑end gold price target to $5,400 per ounce, more than 8 % above current levels, according to Bloomberg. This bullish stance reinforces the perception of gold as a defensive asset and indirectly supports the demand for its digital representations.
- RWA momentum – Real‑world assets (RWAs) are increasingly being tokenized across the DeFi landscape. The $4.88 billion tokenized‑commodities market now processes over $7 billion in monthly transfer volume, signaling robust liquidity and a growing user base that values on‑chain exposure to physical commodities.
Industry commentary
Björn Schmidtke, CEO of the tokenization platform Aurelion, told The Defiant that the recent rally in gold “is not a coincidence; it mirrors a world that is fragmenting and becoming less predictable.” He added that tokenization can mitigate the ownership ambiguities of traditional gold investments, noting that many investors actually hold “claims on gold” rather than the metal itself. Fully allocated, on‑chain tokens, he argued, “restore certainty around ownership.”
On‑chain derivatives activity
Derivatives markets are also reflecting heightened interest. TradeXYZ—a platform built on Hyperliquid—showed a 24‑hour volume of roughly $76 million on its GOLD‑USDC perpetual contract, with open interest near $60 million as of Jan. 23. Such figures underscore the growing appetite for leveraged exposure to gold within the crypto ecosystem.
Key takeaways
- Tokenized gold valuation has crossed the $4 billion threshold, driven largely by XAUT and PAXG, which together dominate the sector.
- Physical gold prices are approaching $5,000 per ounce, bolstering confidence in gold‑backed tokens as a hedge against market uncertainty.
- Liquidity is deepening: daily trading volumes for the top tokens exceed $700 million combined, while gold‑related perpetual contracts on DeFi platforms are posting tens of millions in turnover.
- RWA adoption is accelerating, with tokenized commodities surging more than 20 % in a month and monthly transfer activity topping $7 billion.
- Institutional sentiment is positive, as major banks raise price targets for physical gold, lending credence to the digital token’s underlying asset.
- Risk mitigation narrative: tokenization promises clearer ownership rights compared with traditional gold holdings, a point emphasized by industry leaders.
As spot gold creeps toward the $5,000 mark, the on‑chain gold market appears poised for further expansion, offering investors a blend of traditional safety and blockchain efficiency.
Source: https://thedefiant.io/news/defi/tokenized-gold-capitalization-tops-usd4-billion-as-spot-approaches-usd5-000
