The weekend gold market is undergoing a significant transformation, with blockchain-based tokenized assets now setting the price benchmark while traditional futures markets are closed. According to Iggy Ioppe, former Credit Suisse CIO and now at Theo, tokenized gold tokens like PAXG (Paxos Gold) and XAUt (Tether Gold) are responsible for virtually all publicly visible gold price discovery on weekends when the Chicago Mercantile Exchange (CME) futures market shuts down from late Friday until Sunday evening.
During this gap, regulated price discovery enters a temporary blackout, leaving tokenized gold as the primary venue for observable trading activity. This continuous, 24/7 trading capability allows investors to react immediately to global events, such as geopolitical tensions. For instance, following recent US and Israeli strikes on Iran, tokenized gold prices jumped on a Saturday, with XAUt briefly rising above $5,450 and PAXG climbing close to $5,536, even as Bitcoin and Ether declined.
The market influence of these assets is backed by rapid growth. Data shows the combined market capitalization of tokenized gold has surged approximately 177% over the past year, from around $1.6 billion to $4.4 billion. Trading volume reached about $178 billion last year, with the fourth quarter alone seeing over $126 billion. This positions tokenized gold as the second-largest gold investment product by trading volume globally, behind only SPDR Gold Shares.
Activity is largely driven by professional liquidity firms engaging in arbitrage between blockchain and traditional markets, as well as traders using the tokens for hedging, collateral, or direct bullion exposure. The sector's growth, which accounted for about 25% of all new money flowing into real-world asset (RWA) tokens, has outpaced other tokenized assets like stocks and bonds. This trend underscores a broader shift where blockchain platforms are becoming critical for short-term price direction before traditional markets reopen.
