Gold has been an excellent investment this year. During the price rally of 2025, the price of gold broke the $3,000 and $4,000 milestones for the first time in history.
The value of gold has risen by about 60% since the beginning of 2025.
Gold vs. Bitcoin.
Bitcoin is often considered the digital counterpart of gold, but its performance has not been strong recently. At the same time, the price of the largest cryptocurrency fell by 5%.
In this light, it is ironic that the technology developed on the basis of Bitcoin is now making gold more accessible to investors.
What is Tether Gold (XAUT)?
Gold-backed crypto tokens, such as Tether Gold (XAUT), allow for the addition of gold to one’s investment portfolio practically anywhere in the world (though this comes with conditions that will be presented later).
XAUT is a gold-backed token issued by Tether. Tether is also known as the issuer of the world's largest stablecoin, USDT. In practice, XAUT functions similarly to dollar-pegged stablecoins that crypto investors are already accustomed to. Each circulating XAUT token is backed by one troy ounce of gold held by Tether.
XAUT is available as an ERC-20 token on the Ethereum blockchain. It can be purchased from various centralized exchanges as well as DEX platforms.
Tokens can be converted directly into physical gold, but this applies practically only to a few investors. Redemption requires a certain number of XAUT tokens to obtain one gold bar. Tether states that to redeem physical gold, an investor must deposit at least 430 XAUT tokens (worth about 1.8 million dollars at current prices).
Tether brought XAUT to market in 2020, shortly after Paxos launched PAXG in September 2019. At the time of writing, approximately $2.1 billion worth of gold is tokenized through XAUT tokens. The second-largest gold-backed token, PAXG, follows closely behind with a market value of $1.4 billion.
It is particularly noteworthy that Tether is among the 30 largest gold holders in the world, owning about 116 tons of precious metal. However, only a portion of these reserves is used as collateral for XAUT, as the circulating tokens correspond to about 16.2 tons of gold (1,329 gold bars).
Why do investors choose XAUT?
XAUT is one of the easiest ways to invest in gold, especially if you are already part of the crypto world. You only need an Ethereum-compatible wallet and funds, and you can buy XAUT tokens in seconds, for example, from Uniswap.
When I bought XAUT on Uniswap, I had a similar 'aha moment' as when I started with cryptocurrencies. The idea that I could add gold to my portfolio in a few seconds without KYC or other time-consuming steps reminded me of how blockchain enables many practical things even now, even though the community often complains about adoption issues.
Of course, you can also sell XAUT tokens just as easily as you buy them, which is significantly more convenient than selling physical gold. This makes it one of the most liquid ways to invest in gold. XAUT markets are open 24/7 every day of the year, and anyone can trade it anywhere thanks to DEXs.
Another advantage of XAUT is its divisibility. With XAUT, you can get your investment down to as little as 0.000001 troy ounces of gold, making the product truly accessible to everyone.
What to consider when buying gold-backed tokens like XAUT.
Gold-backed tokens, such as XAUT, are an extremely convenient way to invest in gold, but holding them is not exactly the same as owning physical gold.
The most significant risk relates to counterparty risk. Gold-backed tokens ultimately rely on trust in the issuer (in the case of XAUT, Tether) to properly store the gold reserves, protect them adequately, and facilitate redemptions. If the custodian encounters financial difficulties, acts fraudulently, or loses access to the gold, the value of the tokens may decrease or you may not be able to recover your value.
Additionally, the blockchain-based infrastructure comes with its own risks: hacks, technical errors, or malfunctions of smart contracts can prevent access to tokens or cause discrepancies between the tokens in circulation and the actual gold backing them.
Converting tokens back to physical gold or cash is not always straightforward. Redemptions often involve minimum thresholds, additional costs, and geographical or legal barriers, and in unstable conditions, the issuer may slow down or suspend redemptions. Meanwhile, direct ownership of physical gold allows for full control, as you can store and sell the gold whenever you want.
In this article, we primarily focused on XAUT, as it is the most popular gold-backed token. However, it is worth noting that PAXG operates in a nearly identical manner, and the choice between these two mainly relates to which issuer (Tether or Paxos) one trusts more.
What's next for gold: investors expect new price records in 2026.
Gold in 2025 has regained its 'safe haven' reputation and has been one of the most productive investments. The rise has been fueled by a rare combination of factors: low interest rates and real yields, increased geopolitical and trade-related uncertainty, a clear weakening of the US dollar, and steady demand from central banks.
The algorithmic gold price forecast from CoinCodex, based on the asset's price history, volatility, and broader market trends, predicts that the gold price rally will continue through 2026 and peak around $6,400.
Although this forecast is extremely bullish, CoinCodex is not the only one predicting that the price of gold will rise to new record highs in 2026.
Investment bank Goldman Sachs recently conducted a survey of 900 institutional investor clients, of which 36% expect the price of gold to rise to $5,000 by 2026. At the same time, 33% of respondents gave a more conservative estimate, predicting that gold would rise between $4,500 and $5,000. This too would mean new record levels (the current record is around $4,377).
Daan Struyven, head of commodity research at Goldman Sachs, sets a target price of $4,900. He justifies the forecast by central bank demand and the Fed's ongoing rate cuts, which raise the price of gold.
At the same time, both JPMorgan and HSBC analysts expect the price of gold to exceed $5,000 as early as next year.
