Gold has performed very well this year. During the rise in 2025, the price of gold has for the first time surpassed $3,000 and $4,000.
This precious metal has increased by approximately 60% since January 1, 2025.
Gold vs. Bitcoin
Bitcoin, which many call gold's digital counterpart, has not performed as well. During the same period, the price of the largest cryptocurrency has decreased by 5%.
That is why it is quite ironic that the technology behind Bitcoin today makes it easier to invest in gold than ever before.
What is Tether Gold (XAUT)?
Crypto tokens that have gold as collateral, such as Tether Gold (XAUT), allow everyone to quickly add gold to their portfolio (with some conditions that we explain later).
XAUT is a gold-backed token from Tether, which also issues the world's largest stablecoin, USDT. XAUT functions similarly to stablecoins that are pegged to USD, which many crypto users are already familiar with. Each XAUT token is backed by a troy ounce of fine gold that Tether owns.
XAUT exists as an ERC-20 token on the Ethereum blockchain, and you can buy it on many centralized exchanges and DEXs.
You can redeem your tokens for physical gold directly, but this actually only applies to a few investors. It requires at least the value of a gold bar in XAUT tokens to redeem for physical gold. Tether says that customers wishing to exchange for physical gold should deposit at least 430 XAUT (approximately 1.8 million USD at the current price).
Tether launched XAUT in 2020, shortly after Paxos launched PAXG in September 2019. At the time of writing, XAUT corresponds to about 2.1 billion USD in gold. The second largest token with gold as collateral is PAXG with a market value of 1.4 billion USD.
It is worth mentioning that Tether is among the world's 30 largest gold holders, with about 116 tons of the metal. However, only a part of this is used to back XAUT, as the number of tokens corresponds 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 using crypto. You just need an Ethereum wallet with money and can then buy XAUT in seconds via a DEX like Uniswap.
When I bought XAUT on Uniswap, I had the same aha moment as when I started with crypto. I realized that I could add gold to my portfolio in seconds, without KYC or complicated steps. Blockchain really shows what it can do, even though many often complain that the technology is not used more.
You can of course also sell XAUT just as easily as you can buy it. It is much smoother than selling physical gold. Therefore, it is one of the most liquid ways to invest in gold. The market for XAUT is open 24/7, and everyone in the world can use it directly thanks to decentralized exchanges.
Another advantage of XAUT is that it is divisible. You can invest in as little as 0.000001 ounces of gold, making XAUT accessible to everyone.
This is what you should consider when buying gold-based tokens like XAUT
Although gold-backed tokens like XAUT are a very smooth way to invest in gold, it is not the same as owning physical gold.
The biggest risk is counterparty risk. Gold-backed tokens rely on trust in the issuer (for example, Tether for XAUT) to have the gold secured, store it properly, and make payments. If the custodian encounters financial problems, is dishonest, or loses access to the gold, the tokens can become worthless, or you may not be able to retrieve your value at all.
Blockchain also carries its own risks: hacking attacks, technical flaws, or errors in smart contracts can cause you to lose access to your tokens or for the number of tokens to not match the actual gold.
Exchanging tokens for physical gold or cash is not always easy. There may be minimum amounts, extra fees, and geographical or legal restrictions. In turbulent markets, the issuer may also pause payments. With physical gold, however, you have control yourself and can store or sell it whenever you want.
In this article, we mostly talked about XAUT since it is the most popular gold-backed token. However, it is good to know that PAXG works in a similar way. The most important thing is which issuer you trust the most (Tether or Paxos).
What happens to gold: Investors expect new price records in 2026
Gold has shown in 2025 that it is a 'safe investment' and has become one of the best investments. The price has risen due to lower interest rates, increasing uncertainty in the world and in trade, a weaker US dollar, and steady demand from central banks.
The automated price forecast for gold from CoinCodex, which is based on history, price movements, and market trends, expects that gold will continue to rise in 2026 and reach a peak around 6,400 USD.
This forecast is very positive, but CoinCodex is not alone in predicting that the gold price will reach new record levels in 2026.
The large investment bank Goldman Sachs recently conducted a survey among 900 institutional investors. 36% of them believe that the gold price will reach 5,000 USD by 2026. At the same time, 33% of the participants give a more cautious forecast where the gold price reaches between 4,500 and 5,000 USD. This would also mean new record levels, as the current record is around 4,377 USD.
Daan Struyven, who is head of commodity analysis at Goldman Sachs, has set a price of 4,900 USD. He says that central bank demand and continued interest rate cuts from the Fed are important factors that will increase the gold price.
At the same time, analysts at both JPMorgan and HSBC believe that the gold price will surpass 5,000 USD next year.
