Gold-Backed Tokens See Decline as Gold Price Drops Amid Tariff Talks, Wall Street Maintains Bullish Outlook
Gold-backed cryptocurrencies have taken a hit this week, as the price of gold fell following a period of strong gains. Despite gold rising by over 10% this year, the commodity saw a sharp drop, which was fueled by speculation surrounding President Trump’s proposed tariffs, viewed by many as a bargaining tactic rather than a concrete policy.
Tokens like Paxos Gold (PAXG) and Tether Gold (XAUT) have slipped by approximately 1% in the past week, now trading around $2,900. Meanwhile, the broader cryptocurrency market has been on an upswing, with the CoinDesk 20 Index climbing 5.7%, and the MarketVector Digital Assets 100 Index (MVDA) rising by 3.4%.
The decline in gold’s price came amidst rising chatter that the new tariffs Trump is threatening to impose could be aimed at pushing forward trade negotiations with other nations. This uncertainty has shaken investor confidence in safe-haven assets like gold and the U.S. dollar.
However, Wall Street remains optimistic about gold’s future prospects. According to a recent report by Morgan Stanley, the current dip in gold prices could be an attractive opportunity for investors looking to hedge against rising inflation, geopolitical risks, and increasing global fiscal spending.
Citi has upped its short-term gold price target to $3,000, and UBS has revised its 12-month gold forecast to match that level. With these positive projections, experts believe that gold-backed tokens could also rebound, gaining strength in line with the precious metal’s recovery.
