On April 28, Tether reported that its gold-backed token, XAUT, saw significant growth in Q1 2025. Each token represents one troy ounce of physical gold, with the supply backed by nearly eight tons of gold in Swiss vaults.
By the end of March 2025, XAUT's market capitalization reached $770 million, with each token valued at $3,123. According to the report, the price of XAUT hit a record high of $3,423 on April 21, marking a 9.6% increase from the end of Q1 2025.
The surge in tokenized gold is part of a broader two-year increase in gold prices, driven by central bank purchases. The World Gold Council reported that global gold reserves totaled 37,755 metric tons at the end of 2024, with central banks purchasing 1,044 metric tons that year.
Tether attributes the increased investor interest in gold in early 2025 to economic uncertainty, political tensions, and demand for inflation-resistant investments. The company also noted that El Salvador has included XAUT in its regulated financial products list.
Paolo Ardoino, CEO of Tether, stated that Tether Gold demonstrates gold's strength as a store of value during uncertain times. Each XAUT token is backed by LBMA-certified gold bars and is regularly audited.
Tokenization converts assets like gold into digital tokens for blockchain trading, enabling faster transactions of smaller portions of valuable assets. This allows gold, a traditional hedge against economic distress, to integrate into the new trading model.