TLDR
Table of Contents
- Tether’s XAUT (tokenized gold) is the top-performing digital asset, up 3.4% in 24 hours while crypto markets remain flat
- Gold price hit an all-time high above $3,200, on track for a 5.5% weekly gain
- Investors are seeking gold as a safe haven despite trade war de-escalation due to concerns over US policy and growing budget deficit
- Gold benefits from lower interest rates and economic uncertainty
- US-China trade tensions continue with Trump raising tariffs to 145% and China retaliating with 84% tariffs
Gold-backed cryptocurrencies are having a moment in the spotlight, with Tether’s XAUT leading the pack as investors seek shelter from economic uncertainty. The tokenized gold asset has become the top-performing digital asset in crypto markets that otherwise remain mostly flat.
Tether’s XAUT has risen 3.4% in the last 24 hours, making it a standout performer among major cryptocurrencies. The broader tokenized gold sector is up 4.3% in the same period, according to CoinGecko data.
This surge comes while the CoinDesk 20, an index tracking the largest digital assets, is down 2%.
Gold Reaches Record Highs
Physical gold prices have surged to unprecedented levels, trading above $3,200 in Hong Kong after breaching all-time highs during U.S. trading hours.
The precious metal is on track to book a roughly 5.5% weekly gain as global investors flock to the traditional safe haven.
Gold typically rallies during periods of economic or geopolitical uncertainty, as it’s viewed as a reliable store of value during volatile market conditions.
While there has been some de-escalation in trade tensions, investors remain worried about unpredictable policy from the White House.
The precious metal also benefits from its inverse relationship with interest rates. When rates are lower, the opportunity cost of holding non-yielding gold decreases, making it more attractive to investors.
Economic Concerns Driving Investor Behavior
A major factor driving gold’s rally is growing concern about the U.S. budget deficit. Halfway through fiscal year 2025, the deficit has increased by $1.3 trillion, putting it on pace for $2.6 trillion annually—approximately 9% of GDP.
The independence of the Federal Reserve is also under scrutiny. On April 9, U.S. Supreme Court Chief Justice John Roberts reversed a court ruling that temporarily allowed President Trump’s administration to fire members of independent agencies.
This has raised fears that Trump could fire Fed Chair Jerome Powell, creating further instability in financial markets.
U.S. inflation data showed some cooling in March, with the Consumer Price Index rising 0.1%, putting the 12-month inflation rate at 2.4%, down from 2.8% in February.
Despite this, traders are pricing in three or four interest rate cuts by the end of the year, which could further support gold prices.
The escalating U.S.-China trade war continues to create market anxiety. The White House confirmed on Thursday that President Trump has hiked tariffs on Chinese goods to 145%.
China promptly retaliated with 84% tariffs on U.S. imports and has been strengthening ties with Europe and Asia to ease economic pressure.
Asian equity markets showed mixed performance in response to these developments. Hong Kong’s Hang Seng fell 0.2%, Shanghai’s SSE rose 0.12%, Taipei’s TAIEX climbed 1.6%, and Tokyo’s Nikkei 225 dropped 3.5%.
Meanwhile, China’s state media has reported that stimulus measures are in the works, including interest rate cuts and government spending of approximately $136 billion.
Other strong performers in the crypto market include Curve DAO’s CRV token, which jumped 18% after news that the U.S. plans to relax rules and enforcement related to Decentralized Finance (DeFi).
Technical analysis suggests gold prices may continue their upward trend. The 14-day Relative Strength Index is approaching the overbought region at 70, indicating there may still be room for growth before buyer exhaustion sets in.
The immediate resistance level is seen at $3,250, with potential for movement toward $3,300 if momentum continues.
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