Gold has performed remarkably well this year. During the 2025 rally, the price of gold broke through the milestones of $3,000 and $4,000 for the first time in history.
The precious metal is approximately 60% higher since January 1, 2025.
Gold vs. Bitcoin
Bitcoin, which many say is the digital equivalent of gold, has not performed very well. During the same period, the price of the largest cryptocurrency has decreased by 5%.
It is therefore quite ironic that the technology that pioneered Bitcoin is now being used to make investing in gold more accessible than ever.
What is Tether Gold (XAUT)
Gold-backed crypto tokens like Tether Gold (XAUT) make it possible for anyone worldwide to add gold directly to their portfolio (with a few caveats that we will explain shortly).
XAUT is a gold-backed token issued by Tether, which also issues the largest stablecoin in the world: USDT. The idea behind XAUT is similar to the dollar-pegged stablecoins that crypto investors are already familiar with. Each XAUT token in circulation is backed by one troy ounce of pure gold that Tether holds.
XAUT is available as an ERC-20 token on the Ethereum blockchain, and you can buy it on various centralized exchanges and DEXs.
The tokens can be directly redeemed for physical gold, but in practice, this applies only to a small group of investors. You need tokens worth at least one gold bar to receive physical gold. According to Tether, customers who want to receive physical gold must deposit at least 430 XAUT ($1.8 million at the current price).
Tether launched XAUT in 2020, shortly after Paxos launched PAXG in September 2019. At the time of writing, XAUT represents approximately $2.1 billion in gold. The second largest gold-backed token, PAXG, follows with a market capitalization of $1.4 billion.
It is also noteworthy that Tether is among the 30 largest gold holders in the world and owns approximately 116 tons of gold. However, only a portion of that serves as backing for XAUT, as the amount of tokens in circulation is equivalent to about 16.2 tons of gold (1,329 gold bars).
Why do investors choose XAUT?
XAUT is one of the easiest ways to gain exposure to gold as an investment, especially if you are already active in the crypto world. You just need an Ethereum-compatible wallet with some funds, and you can then buy XAUT on a DEX like Uniswap within seconds.
When I bought XAUT on Uniswap, I had the same 'aha moment' as when I first started with crypto. The realization that I could add gold to my portfolio within seconds without KYC or other complicated processes showed me that blockchain already offers very convenient possibilities, even though the community often complains about the lack of adoption.
You can of course sell XAUT just as easily as you can buy it, which is much simpler than selling physical gold. This makes it one of the most liquid ways to gain exposure to gold. The market for XAUT is open 24/7, and anyone worldwide can access it directly thanks to decentralized exchanges.
Another advantage of XAUT is that you can easily divide it. With XAUT, you can gain exposure to just 0.000001 ounces of gold, making it accessible to everyone.
What to watch out for when buying gold-backed tokens like XAUT
Although gold-backed tokens like XAUT are very easy to invest in gold, it is not quite the same as holding physical gold.
The main point is that these tokens carry counterparty risk. Gold-backed tokens are ultimately based on the trust that the issuer (for example, Tether for XAUT) manages sufficient gold reserves, stores them securely, and actually executes redemptions. If the custodian goes bankrupt, acts dishonestly, or loses access to the gold, the tokens may lose value or you could even lose your money entirely.
On top of that, the on-chain infrastructure also brings risks: hacks, technical errors, or issues with smart contracts can lead to you being unable to use your tokens or the token supply deviating from the actual gold reserves.
Exchanging tokens for physical gold or cash is not always easy either. There may be hurdles regarding minimum amounts, extra costs, or geographical and legal restrictions. In turbulent times, the issuer may slow down or even pause the process. Those who own physical gold always have direct control over it and can sell it whenever they wish.
In this article, we primarily looked at XAUT, as it is the most popular gold-backed token. However, it is good to know that PAXG is very similar in operation. The choice between the two essentially comes down to which issuer you trust the most (Tether or Paxos).
What follows for gold: investors expect new price records in 2026
Gold has proven its reputation as a 'safe haven' in 2025 and has emerged as one of the most successful investments. The rise comes from a unique combination of factors: lower interest rates and real returns, increased geopolitical tensions and uncertainty in trade, a clear weakening of the US dollar, and ongoing demand from central banks.
The gold price forecast from CoinCodex, which is based on price history, volatility, and overall market trends, predicts that gold will continue to rise in 2026 and may peak around $6,400.
Although this expectation is quite bullish, CoinCodex is not the only one predicting that the gold price will reach new all-time highs in 2026.
Large investment bank Goldman Sachs recently conducted a survey among 900 institutional investment clients. Of these, 36% believe that gold will reach $5,000 in 2026. Furthermore, 33% of respondents predict that gold will fall between $4,500 and $5,000, which would also mean new all-time highs (the current record is around $4,377).
Daan Struyven, head of commodities research at Goldman Sachs, set a target price of $4,900. He cites central bank demand and ongoing interest rate cuts by the Fed as key reasons for rising gold prices.
Analysts from JPMorgan and HSBC also expect that the gold price will exceed $5,000 next year.
