Fun

As Gold Prices Soar, Two Gold-Backed Tokens See Increased Demand Fetching Premiums

News Feed - 2020-08-28 12:08:36

As Gold Prices Soar, Two Gold-Backed Tokens See Increased Demand Fetching Premiums


The last few months have bolstered the price of the precious metal gold as governments worldwide have created tremendous amounts of debt and inflation. For instance, the value of gold per ounce jumped over $2k during the first week of August. Meanwhile, similarly to the physical counterparts, two blockchain tokens that claim to be backed by gold have seen significant demand and small premiums. While a handful of other ‘digital gold’ crypto coins have seen market valuations shudder this year.


On August 3, 2020, the price of a single ounce of .999 gold spiked to $2,045 per unit. Since then, the precious metal per ounce lost -5.6% in value during the course of the month.


Experts believe that gold’s value could jump to $3k per ounce by the year’s end if politicians and central banks continue to create economic disasters. While gold has increased considerably this year, it’s been growing much harder to obtain physical bullion, gold coins, and bars unless you buy in bulk.The spot price at the time of publication for one ounce of fine gold on Thursday, August 27, 2020, is around $1,926.


The infamous gold bug and analyst Egon von Greyerz has warned investors on various occasions that in recent months that there is a “massive shortage of physical gold.” Especially when it comes to traditional gold futures markets and the London bullion market (LBMA).


The LBMA is one of the largest wholesale over-the-counter markets for gold and silver worldwide.


“There is a massive shortage of physical gold in the futures markets and LBMA system. As gold goes up and the holders of gold ask for physical delivery, there will be no gold available to settle the paper claims,” the analyst stressed.


Another sector that has been growing fervently is the demand for gold-backed cryptocurrencies and two of these tokens are fetching a premium. During the last two weeks, the gold-backed tokens PAXG, and XAUT have seen consistent premiums over the spot price of gold between 0.5% to 3%.




For instance, this year there are more than 77 crypto projects that leverage the shiny yellow precious metal. Tether Limited has issued a coin called XAUT which is trading for $1,938 per ounce as opposed to the spot price of gold’s $1,926.


A single XAUT is represented by “one troy fine ounce of gold on a London Good Delivery gold bar.” XAUT carries a 0.62% premium at the time of publication.




Pax Global’s pax gold (PAXG) token also carries a small premium right now over the spot price of gold today at $1,934 per PAXG. The PAXG token is also backed by one fine troy ounce London Good Delivery gold bar.


As far as market valuation and trade volumes, a number of smaller gold-backed tokens pale in comparison to PAXG and XAUT tokens. In 2020, Tether Limited and Pax Global’s gold crypto products stand out above the competition.The Karatgold coin market has been incredibly bearish in 2020. The project claims it is backed by 4% of physical gold, however, Florida state regulators have investigated the project’s creators alongside regulators warning investors from South Africa and Germany. Since the start of the investigations into the KBC creators, the gold ERC20 token has slid in value considerably.


For instance, during the first month of 2020 Karatgold coin (KBC) has a market capitalization of around $65 million. Today, KBC’s market cap is down to $16 million, and during the last 24 hours the token has shed -26.38%. The creators of KBC have been involved in multiple investigations involving financial regulators from a variety of countries.DGX tokens represent one gram of 99.99% gold bars cast from refiners approved by the London Bullion Market Association according to the project’s founders.


Digixglobal’s digix gold token (DGX) has seen a slight market cap increase since the start of the year, as it has increased $968,892 so far. DGX only has around $200,000 a day worth of global trade volume. The token price of a single DGX has lost -6.54% in value during the last 24 hours.


The project launched by Coinshares, digital gold (DGLD), is featured as an “Untracked Listing” on Coinmarketcap.com, but the website shows no market data.“Each DGLD token represents ownership of 1/10th of a fine troy ounce of gold, vaulted in Switzerland,” according to the DGLD white paper.


DGLD trades on the exchange operated by Blockchain.com and the token is paired with bitcoin (BTC). A single DGLD is swapping for 0.016882 BTC ($190) at the time of publication.


What do you think about gold-backed digital currencies? Let us know what you think about these projects in the comments section below.Grayscale"s Litecoin and Bitcoin Cash Trusts Trade for Tremendous PremiumsFINANCE | 6 days agoReport: Bitcoin Untied from the Economic Cycle, "Largely Uncorrelated to Other Asset Classes"FINANCE | Aug 18, 2020Tags in this story.999 gold, 1/10 Troy Ounce, Blockchain.com, Coinshares, crypto, DGLD, DGX, digital gold, Digix, Finance, gold, Gold Tokens, Gram of Gold, KBC, KBC Investigation, One Troy Ounce, Pax Global, PAXG, XAUT


Image Credits: Shutterstock, Pixabay, Wiki Commons, Blockchain.com, Coinmarketcap.com, Tradingview,Use Bitcoin and Bitcoin Cash to play online casino games here.Disclaimer: This article is for informational purposes only. It is not a direct offer or solicitation of an offer to buy or sell, or a recommendation or endorsement of any products, services, or companies. Bitcoin.com does not provide investment, tax, legal, or accounting advice. Neither the company nor the author is responsible, directly or indirectly, for any damage or loss caused or alleged to be caused by or in connection with the use of or reliance on any content, goods or services mentioned in this article.Read disclaimerShow comments

News Feed

Fantom Launches NFT Marketplace Artion – Platform Aims to ‘Unburden Creators of High Fees’
Fantom Launches NFT Marketplace Artion - Platform Aims to "Unburden Creators of High Fees" On September 24, 2021, the Fantom Foundation announced the launch of a new non-fungible t
Spain to Offer Grants for Metaverse Companies
Spain to Offer Grants for Metaverse Companies The government of Spain has announced it will issue a series of grants and aid for metaverse-related developments. The individuals and
US and UK Agree to ‘Heighten the Focus on Illicit Use of Cryptocurrency’
US and UK Agree to "Heighten the Focus on Illicit Use of Cryptocurrency" The U.S. and U.K. governments have “committed and agreed to heighten the focus on illicit use of cry
William SubergNov 04, 2023Bitcoin bulls defend $34K as trader predicts next BTC price ‘impulse’Bitcoin is setting up for another trip past $35,000, analysis argues, as BTC price settles into the weekend.18636 Total v
Bitcoin, Ethereum Technical Analysis: BTC Remains Near $23,000 to Start the Week
Bitcoin, Ethereum Technical Analysis: BTC Remains Near $23,000 to Start the Week Bitcoin continued to hover around the $23,000 level on Jan. 23, as bullish sentiment remained high
HTC Unveils Privacy Protecting 5G Router, Pundi X Finalizes Blockchain Phone Prototype
HTC Unveils Privacy Protecting 5G Router, Pundi X Finalizes Blockchain Phone Prototype Product announcements in the mobile and internet communications sector have indicated that
Wu-Tang Clan’s Unreleased Album Changes Hands From Martin Shkreli to an NFT Art Collective
Wu-Tang Clan"s Unreleased Album Changes Hands From Martin Shkreli to an NFT Art Collective After fighting in court since 2015, the former hedge fund manager Martin Shkreli was sent
Yearn Finance Token Jumps 270% in 5 Days – Defi Token YFI Worth More Than a Single Bitcoin
Yearn Finance Token Jumps 270% in 5 Days - Defi Token YFI Worth More Than a Single BitcoinDecentralized finance (defi) continues to make waves this week, as the Yearn Finance projec
New wave of GameFi projects are costing millions of dollars to develop
Zhiyuan Sun9 hours agoNew wave of GameFi projects are costing millions of dollars to developPlayers are increasingly demanding greater playability and interactions that allow them to actually enjoy the Web3 games they pl
Report: Federal Prosecutors in New York Probe Digital Currency Group and Subsidiary Genesis
Report: Federal Prosecutors in New York Probe Digital Currency Group and Subsidiary Genesis Following accusations from Gemini co-founder Cameron Winklevoss in an open letter to Dig
GRN (G) Is Now Available for Trading on LBank Exchange
GRN (G) Is Now Available for Trading on LBank Exchange press release PRESS RELEASE. INTERNET CITY, DUBAI, Jun. 24, 2022 – LBank Exchange, a global digital asset trading platf
Tom Mitchelhill7 hours agoBrazil’s Congress puts Binance CEO CZ in crosshairs for indictmentA congressional committee has recommended that Changpeng Zhao and three local Binance executives be indicted for fraud and oth