Tether announced a 9.5% increase in the physical gold reserves backing its tokenized gold product, Tether Gold (XAUt), during the second quarter. The company stated that this growth signals strengthened demand for tokenized exposure to physical gold, even as the underlying commodity experienced a significant decline in value.
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AAPLGold’s sharp decline contrasts with XAUt reserve increase
Gold prices fell 14.1% during the second quarter, marking their steepest quarterly loss since the same period in 2013, according to TradingView data. Despite this downturn, investors continued to purchase XAUt, increasing their physical gold holdings through the tokenized product.
Paolo Ardoino, CEO of Tether, attributed this trend to strategic buying by investors. He explained that XAUt holders are actively increasing their gold exposure during market corrections as well as price rallies.
Holders of Tether Gold are not only buying XAUt when the price of gold is rising. They are using periods of market weakness to increase their ownership of physical gold through a product that is fully backed, transparent, portable and accessible onchain.
This approach, Ardoino said, reflects growing trust in transparent, onchain gold-backed tokens, regardless of short-term market movements.
Tokenized commodities: Market trends and growth
Throughout the past 30 days, the total value of distributed tokenized commodities dropped 4.2% to $4.58 billion, according to RWA.xyz data. In the same timeframe, the number of holders increased 6.5%, reaching 253,000. This suggests a trend where more investors are entering the space even as aggregate market value contracts.
Tether Gold secured its position as the largest distributed tokenized commodity product, with a total value of $2.4 billion as of Monday. The asset is fully supported by allocated physical gold stored in vaults, offering investors a blockchain-based instrument for traditional precious metal exposure.
In the first quarter, the physical gold reserves supporting XAUt rose 36% to reach 707,747 fine troy ounces, which was valued at $3.3 billion at quarter-end.
| Quarter | XAUt Gold Reserves | XAUt Value | Gold Price Movement |
|---|---|---|---|
| Q1 2024 | +36% to 707,747 fine troy oz | $3.3 billion | Not specified |
| Q2 2024 | +9.5% | $2.4 billion (as of Monday) | -14.1% |
In July, XAUt received Shariah certification from Amanah Advisors, an Islamic finance consultancy. This certification can enable broader access for Islamic financial institutions and clients seeking Shariah-compliant gold investment opportunities.
Mini dictionary: Amanah Advisors, an advisory firm specializing in Islamic finance, ensures that financial products comply with Shariah law by conducting independent reviews and certifications.
Tether Gold’s market leadership
Tether Gold’s $2.4 billion total value cements its position at the top of the tokenized commodity market. The product offers blockchain-based ownership of physical gold, secured in professional vaults, and aims to provide transparency and on-chain accessibility for investors worldwide.
As traditional and digital asset markets continue to intersect, Tether reported steady inflows into XAUt, reflecting persistent interest from both institutional and retail participants in diversifying through tokenized commodities.
