Record Gold Demand Boosts Tether’s XAUt Token Amid Macroeconomic Uncertainty

Amid heightened macroeconomic volatility, a renewed gold rush has swept institutional investors and central banks. Physical gold reached record highs this year, and this trend has significantly impacted Tether’s gold-backed digital token, Tether Gold (XAUt).

According to Tether’s latest attestation report, verified by BDO Italia, the XAUt token backed reserves reached **7.66 tons of fine troy ounces** by the end of the Q2 2025 period. This reserve underpins over **259,000 XAUt tokens** in circulation, contributing to a **total market capitalization exceeding $800 million**.

The price of Tether Gold mirrors the market value of physical gold, currently trading just below $3,400 per ounce. Launched in January 2020, XAUt effectively brings gold onto the blockchain, combining tangible asset backing with blockchain portability, divisibility, and redeemability – attributes commonly associated with Bitcoin.

Over the past 12 months, XAUt’s price has surged **40%, tracking spot gold performance**. The token is available on major exchanges including Bybit, Bitfinex, BingX, KuCoin, and recently Maxbit.

The following chart illustrates XAUt market cap growth:

Gold Demand Gains Momentum Amid Macroeconomic and Geopolitical Turbulence

Despite crypto narratives positioning Bitcoin as “digital gold,” physical gold remains a primary institutional safe haven.

The World Gold Council reported **global central banks accumulated over 1,000 metric tons of gold in 2024**, marking the third consecutive year exceeding this benchmark and signaling confidence in future gold reserve growth.

The following visualizes central bank gold accumulation trends:

Christopher Gannatti, WisdomTree’s global head of research, commented, calling the rapid accumulation “not normal,” noting a **decades-long shift from central banks being net sellers to accumulating reserves**.

Gannatti further explained, “In a world of rising geopolitical risk and currency weaponization, gold is one of the few assets that travels well across borders and regimes.”

This trend has extended to institutional investment, with record inflows into gold Exchange-Traded Funds (ETFs). The World Gold Council reported **$38 billion in inflows during the first six months of 2025**, significantly adding to physical holdings.

The surge stems from growing concerns over economic instability linked to the Trump administration’s trade policies, persistent inflationary pressures, and cautious monetary policy stances globally.

The following perspective highlights key drivers of gold demand:

Institutional Take

WisdomTree highlighted gold’s role as a diversifier, emphasizing its relatively low correlation to other asset classes. With the bullion price recently surpassing the $3400 psychological barrier, the ETF landscape entered record territory.

Economists anticipate inflation to persist, prompting hesitation in anticipated Fed rate cuts observed by analysts like Preston Caldwell.