Investors are pouring billions into gold-backed exchange-traded funds (ETFs). This signals a shift in sentiment as uncertainty rises, prompting investors to seek safe-haven assets. According to the World Gold Council, physically-backed gold ETFs saw their largest weekly inflow since March 2022, with 52.4 tons added, worth around $4.9 billion. This comes as spot Bitcoin ETFs registered a record daily outflow of nearly $1 billion. The stark contrast suggests a renewed appetite for gold amid geopolitical tensions and speculation around potential Trump-era tariffs.
Gold-Backed Crypto Outperform Traditional Cryptos
Gold’s rise isn’t just benefiting traditional markets. Cryptocurrencies backed by gold, such as Paxos Gold (PAXG) and Tether Gold (XAUT), have outperformed the broader crypto market, which is up 26% year-over-year according to the CoinDesk 20 Index. The appeal is simple—these tokens track gold’s price, which has surged nearly 11% in 2025 and an eye-popping 43% over the past year. Data from RWA.xyz shows that over $25 million worth of commodity-backed tokens were minted this month, marking the highest volume since December 2022. Meanwhile, $12 million worth of these tokens were burned. This reflects strong trading activity.
Supply Stagnates While Demand Soars
While demand for gold-backed assets continues climbing, supply remains tight. The World Gold Council reports that gold mining production in Q4 2024 actually fell by around two tons compared to the previous quarter. Recycling and hedging activity increased, but total supply only rose by about 1% year-over-year. With a limited supply and strong investor demand, gold prices are now hovering at $2,912 per ounce.
