Gold-Linked Crypto Tokens Lose Steam as Market Turmoil Triggers Profit-Taking

Gold-backed digital assets lost momentum on Friday, reversing earlier gains as a sweeping global sell-off overshadowed haven demand. Paxos Gold (PAXG) and Tether Gold (XAUT), which had soared to record highs following President Donald Trump’s announcement of sweeping retaliatory tariffs, fell sharply by day’s end.

Initially, investors rushed into gold-linked tokens as geopolitical uncertainty mounted, pushing PAXG to $3,191 and XAUT to $3,190—both surpassing physical gold’s peak of $3,167. But the rally fizzled quickly as broader market panic forced traders to unwind positions. PAXG slid to $3,074 and XAUT to $3,064, while spot gold declined to $3,038 per ounce.

Massive equity losses exacerbated the retreat. The S&P 500 recorded one of its steepest drops in years, and the Nasdaq 100 suffered its worst one-day point decline on record, according to The Kobeissi Letter. Losses rippled globally, with the MSCI World Index tumbling 4.3% on Friday, following Thursday’s 3.7% drop.

Despite the pullback, gold-backed cryptocurrencies remain among 2025’s best-performing assets, up 17% year-to-date. Supportive factors include a dovish Federal Reserve, sustained demand from Asia, and heavy central bank buying. February saw net gold purchases of 24 metric tons, per the World Gold Council.

Poland emerged as a standout buyer, adding 29 tons to its reserves, which now make up 20% of the nation’s foreign holdings. Other notable purchasers included China, Turkey, Jordan, and Qatar.