TLDR:
- Tether’s XAUT was a top-10 performing digital asset, up 3.4% in 24 hours
- Tokenized gold sector rose 4.3% while broader crypto markets fell 2%
- Gold reached a new all-time high of $3,218
- Asian investors favor gold tokens despite trade war tensions easing
- Concerns about U.S. policy unpredictability and budget deficit drive gold demand
Gold-backed cryptocurrencies are shining bright in otherwise flat crypto markets, with Tether’s XAUT emerging as a standout performer. As traditional gold prices reach new heights, investors in Asia are increasingly turning to tokenized versions of the precious metal.
Tether’s XAUT has become one of the top-performing digital assets, showing a 3.4% gain over the past 24 hours. This gold-backed token is currently the largest of its kind by market capitalization.
The broader tokenized gold sector is outpacing the general cryptocurrency market by a wide margin. According to CoinGecko data, gold-backed tokens have risen 4.3% in the last day, while the CoinDesk 20 index of major digital assets has dropped 2%.
Gold’s Continued Appeal
Physical gold prices hit an all-time high during U.S. trading hours before experiencing a slight pullback in early Asian trading. The yellow metal is currently trading at $3,218 in Hong Kong markets.
The precious metal has long been considered a safe haven during times of economic uncertainty. Despite recent cooling in trade tensions, investors remain drawn to gold due to several factors.
One key driver is the perceived unpredictability of U.S. policy under the current administration. This uncertainty has sent many investors looking for stability in traditional safe assets.
Low interest rates also play a role in gold’s appeal. When rates are low, the opportunity cost of holding non-yielding assets like gold decreases, making them more attractive to investors.
Another major concern pushing investors toward gold is the growing U.S. budget deficit. Jeffrey Gundlach, a well-known investor, highlighted this issue in a recent tweet, noting that the deficit has increased by $1.3 trillion halfway through fiscal year 2025, putting it at about 9% of GDP.
Halfway through fiscal year 2025, the U.S. Budget deficit increased by $1.3 trillion. So we are up to a $2.6 trillion annual rate. That rounds up to an incredible 9% of GDP. The fit is hitting the shan.
— Jeffrey Gundlach (@TruthGundlach) April 10, 2025
Asian Market Reaction
Equity markets across Asia showed mixed results during the morning session. Hong Kong’s Hang Seng dropped 0.2%, while Shanghai’s SSE edged up by 0.12%. Taiwan’s TAIEX posted a gain of 1.6%, but Tokyo’s Nikkei 225 fell sharply by 3.5%.
Chinese state media has reported that stimulus measures are being prepared for the country’s economy. These plans allegedly include interest rate cuts and government spending of approximately $136 billion.
The popularity of tokenized gold remains strong among crypto investors in Asia. Both Tether’s XAUT and Paxos’ PAXG have become favorites for those seeking stability in the volatile crypto space.
Gold-backed tokens offer the security of gold while providing the convenience and divisibility of digital assets. These tokens are typically backed by real gold held in reserves, with each token representing a specific amount of the physical metal.
For investors concerned about economic instability, these tokens provide a bridge between traditional safe-haven assets and the cryptocurrency ecosystem. They allow for easier trading and don’t require physical storage.
Beyond gold tokens, other market leaders included Curve DAO’s CRV, which jumped 18% in a single day. This surge followed news that the United States plans to relax rules and enforcement related to Decentralized Finance (DeFi).
The strong performance of gold-backed tokens comes at a time when the price of gold in Indian markets has also reached new heights, crossing the Rs 94,000 per 10 grams level. This global trend underscores the worldwide appeal of gold during periods of economic uncertainty.
As markets navigate through mixed signals about trade tensions and economic policies, the appeal of gold and its digital representations appears likely to continue in the near term.
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