Gold-backed cryptocurrencies such as Paxos Gold (Paxg) and Tether Gold (Xaut) retreated from record highs on Friday amid a sale of global financial markets that wiped out $2.5 trillion from US stocks alone a day after President Donald Trump revealed his mutual tariffs.
The tokens, backed by physical gold, tracking their prices, were first rallying as investors sought shelter from the uncertainty introduced by tariffs. Gold is usually considered a haven investment, but large losses in the stock market often force investors to settle safer assets to cover margin calls and cash out losses.
Paxg climbed to an all-time high of $3,191, while Xaut reached $3,190, surpassing Spot Gold’s peak of $3,167. The initial rise didn’t last, but PaxG dropped to $3,074 and Xaut to $3,064, reflecting Gold’s pullback at $3,038 per ounce.
The tariffs announced on Wednesday surprised the market with unclear targets in breadth. The already unstable investors responded quickly from the volatile global outlook. The S&P 500 posted one of the steepest drops since the panic during the Covid era in 2020 on Thursday, but according to a letter from Kobeissi, the Nasdaq 100 saw the worst day’s point loss in history. The route was extended on the second day, and after losing 3.7% on Thursday, the MSCI World Index fell 4.3% on Friday.
Still, money support tokens are up 17% since the beginning of this year. The rally is driven by a wave of interest cuts on the Federal Reserve, sustained demand from Asia, and central bank purchases at the beginning of the year. In February, the central bank reported the purchase of 24 metric tons of pure gold, according to the World Gold Council.
Poland led the pack, adding 29 tons and bringing total reserves to 480 tons. Currently, it is 20% of foreign exchange holdings. China, Türkiye, Jordan and Qatar also increased their holdings.
