Over the past 24 hours, tokenized gold tokens XAUt (Tether Gold) and PAXG (Pax Gold) each plunged roughly 6%, mirroring gold’s sharp selloff. As investors scrambled out of gold positions, the tokens, being backed one-for-one by physical gold holdings, had to bear the brunt. The XAUt/PAXG pair on Curve saw a ~5.86% fall in 24 hours, with the pair’s high & low over the day at ~$4,359.04 and ~$4,000.70, respectively.
Spot gold fell to around $4,122 per ounce in intraday trading on Tuesday. Some reports pegged the drop as the largest single-day decline since 2013. In recent trading, gold had soared to all-time highs near $4,380.89 before reversing hard. Prior to the fall, gold was trading in the $4,250–$4,350 range amid its historic rally.
What sparked the crash?
Several factors converged to turn the rally on its head. After such a blistering run, many traders chose to book profits and lock in gains. Risk-on sentiment rebounded in equities and crypto, drawing capital away from safe havens. Moreover, technical indicators suggested overbought levels, while some analysts had warned that a correction was due. On the macro front, slower or fewer than expected rate cuts by the Fed could temper further upside.
Gold’s glittering rally in 2025
Gold’s rally in 2025 had been nothing short of spectacular. It has gained over 60% year-to-date, repeatedly breaking records, a Reuters report showed. The ascent was fueled by surging safe-haven demand, central bank accumulations, weakening U.S. dollar perceptions, and expectations of future Fed rate cuts. HSBC has upgraded its average forecasts on gold Prices, and Bank of America now sees gold possibly reaching $5,000/oz by 2026.