Gold prices trade at $4,965 per ounce as of writing, up 2.4% over the past seven days, while the tokenized gold market has surged beyond $6 billion in total value. This rapid expansion marks one of the strongest growth phases in blockchain-based commodities, fueled largely by demand for gold-backed digital tokens. Industry data shows that tokenized commodities, led overwhelmingly by gold, have climbed 53% in under six weeks. The sector has added more than $2 billion year-to-date and now locks over 1.2 million ounces of physical gold in vaults that back digital tokens circulating on blockchain networks. Investors increasingly seek exposure to gold through on-chain instruments that offer 24/7 trading and fractional ownership. Source: @Gateresearch via X Gold Rally Drives On-Chain Demand The surge in tokenized gold closely tracks the metal’s historic price run. Gold rose from around $2,600 per ounce on January 2nd, 2025, to an all-time high of near $5,600 on January 28, 2026, according to Trading Economics data. Over the past two years, the metal has gained roughly 140%, supported by persistent inflation concerns, geopolitical tensions, central bank buying, and uncertainty around U.S. monetary and fiscal policy. As gold tested record levels, investors turned to blockchain-based versions of the asset. Tokenized gold allows holders to claim exposure to physical bullion stored in vaults without handling custody logistics. Settlement occurs on-chain with near-instant finality, which appeals to market participants who operate within digital asset ecosystems. XAUT and PAXG Command Market Share Two tokens dominate the space. Tether Gold (XAUT) and Paxos Gold (PAXG) together control approximately 96.7% of the tokenized gold market. XAUT’s market capitalization has climbed to $2.65 billion, reflecting gains of more than 50% over the past month. PAXG stands near $2.3 billion, supported by institutional interest in audited and compliant structures. Source: Our Crypto Talk via X This concentration underscores the rapid rise of real-world asset tokenization while highlighting structural questions. The dominance of two issuers concentrates counterparty and custody exposure within a narrow segment of the market. Any operational disruption or shift in trust toward these custodians could influence the broader $6 billion niche. The composable structure of decentralized finance adds another layer of complexity. Market participants often use tokenized gold as collateral across multiple protocols. Under stress conditions, liquidations within one platform could trigger broader market reactions. Such interconnections shape risk dynamics in ways that differ from traditional gold exchange-traded funds or direct physical holdings. A Split Market Narrative The growth of tokenized gold also reflects a broader shift in investor behavior. In an environment marked by ranging crypto prices and macroeconomic uncertainty, capital flows toward assets with perceived stability and tangible backing. At the same time, other segments of the digital asset market continue to attract speculative interest. This dual movement signals a market that searches for direction. Some investors hedge with blockchain-based gold, while others pursue high-risk opportunities elsewhere in crypto. Rather than contradict each other, these flows illustrate how participants adapt to changing economic signals. Last two weeks, Gold traded at historic levels and tokenized supply expands beyond 1.2 million ounces, and the digital commodities sector stands at a notable inflection point. The question now centers on whether sustained gold strength will continue to draw capital on-chain, or whether shifts in macro conditions will alter the pace of this rapid expansion.
