Gold has been a very strong player this year. During the upturn in 2025, the gold price has for the first time in history broken both $3000 and $4000.
The precious metal has risen by about 60% since January 1, 2025.
Gold vs. Bitcoin
Bitcoin, which many claim is gold's digital counterpart, has not performed as well. In the same time period, the price of the largest cryptocurrency has fallen by 5%.
It is quite ironic that the technology introduced by Bitcoin is now being used to make investment access to gold more available than ever before.
What is Tether Gold (XAUT)?
Gold-backed crypto tokens like Tether Gold (XAUT) allow anyone in the world to add gold to their portfolio in an instant (with some caveats we will explain later).
XAUT is a gold-backed token issued by Tether, which also issues USDT, the world's largest stablecoin. Conceptually, XAUT is similar to dollar-pegged stablecoins that crypto investors are already well acquainted with. Each XAUT token in circulation is backed by one troy ounce of gold held by Tether.
XAUT is available as an ERC-20 token on the Ethereum blockchain and can be purchased on a number of centralized exchanges and DEXs.
The tokens can be directly redeemed for physical gold, but this only applies in practice to a small number of investors. To redeem XAUT for physical gold, you must have a number of tokens equivalent to the value of one gold bar. Tether states that customers wishing to redeem for physical gold must deposit at least 430 XAUT ($1.8 million at current prices).
Tether launched XAUT in 2020, shortly after Paxos launched PAXG in September 2019. As of now, XAUT tokenizes approximately $2.1 billion in gold value. The second-largest gold-backed token, PAXG, is not far behind, with a market value of $1.4 billion.
It is worth noting that Tether is among the 30 largest gold holders in the world, owning around 116 tons of the precious metal. However, only a portion of these reserves is used to support XAUT, as the number of tokens in circulation corresponds to approximately 16.2 tons of gold (1329 gold bars).
Why are investors choosing XAUT?
XAUT is one of the simplest ways to gain exposure to gold as an investment, especially if you are already in the crypto ecosystem. You only need an Ethereum-compatible wallet with some funds, and you can buy XAUT in seconds on a DEX like Uniswap.
When I bought XAUT on Uniswap, I had the same 'aha moment' that I had when I first started with crypto. The insight that I just added gold to my portfolio in seconds without KYC or tedious processes reminded me that blockchain truly enables a lot of exciting possibilities already, even though the community often complains about a lack of adoption.
Of course, you can also sell XAUT just as easily as you can buy it, which is significantly simpler than the process of 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 in the world can access it immediately thanks to decentralized exchanges.
Another advantage of XAUT is its divisibility. With XAUT, you can gain exposure to as little as 0.000001 ounces of gold, making it highly accessible for everyone.
This is something to keep in mind when purchasing gold-backed tokens like XAUT.
Although gold-backed tokens like XAUT are an extremely convenient way to invest in gold, it's not quite the same as owning physical gold.
The important thing is that these tokens involve counterparty risk. Gold-backed tokens fundamentally rely on trust in the issuer (for example, Tether for XAUT) to maintain gold reserves, store them securely, and fulfill redemptions. If the repository fails financially, acts dishonestly, or loses access to the gold, tokens can lose value, or you may risk not getting your value back.
In addition, the infrastructure on the blockchain has its own risk factors: hacking attacks, technical failures, or smart contract issues can hinder access to your tokens or cause the token holdings to deviate from what is actually in reserve.
Converting tokens back to physical gold or cash is also not always straightforward. Redemptions may require minimum thresholds, additional costs, as well as geographical or legal restrictions, and in volatile periods, the issuer may pause the process or slow down the pace. At the same time, physical gold gives you direct control since you can store it yourself and sell it whenever you want.
In this article, we have primarily focused on XAUT, as it is the most popular gold-backed token. However, it is worth mentioning that PAXG is functionally very similar, and the choice between the two fundamentally comes down to which issuer you trust the most (Tether or Paxos).
What happens next for gold: Investors expect new price records in 2026.
Gold has, in 2025, lived up to its reputation as a 'safe haven' and has proven to be one of the year's most successful investments. The rise has been driven by a rare combination of factors: lower interest rates and real returns, increased geopolitical and trade uncertainty, significant weakening of the US dollar, and steady demand from central banks.
The algorithm-based gold price forecast from CoinCodex, which is based on asset price history, volatility, and general market trends, predicts that gold will continue to rise through 2026 and reach a peak of around $6,400.
Although this forecast is very bullish, CoinCodex is not alone in predicting that the gold price will continue to reach new all-time highs in 2026.
The large investment bank Goldman Sachs recently conducted a survey among 900 institutional investor clients, and 36% of them predict that gold will reach $5,000 in 2026. At the same time, 33% of respondents gave a more conservative forecast that gold will reach between $4,500 and $5,000, which would also lead to new all-time highs (the current record is around $4,377).
Daan Struyven, head of commodity research at Goldman Sachs, has set a price target of $4,900, citing demand from central banks and continued interest rate cuts from the Fed as the main drivers for higher gold prices.
At the same time, analysts at both JPMorgan and HSBC expect the gold price to exceed $5,000 next year.
