Gold-Backed Tokens Surge as Central Bank Buying Slows

The gold market is witnessing a notable shift, with digital demand outpacing traditional buyers like central banks. Recent data from rwa.xyz shows over $80 million in gold-backed cryptocurrency tokens were minted in the past month, marking a three-year high in net issuance. This pushed the sector’s total market capitalization up 6% to $1.43 billion, while monthly transfer volume soared 77% to $1.27 billion, signaling a resurgence in digital gold interest.

This trend coincides with broader shifts in global gold demand. According to the World Gold Council, total demand reached 1,206 tonnes in Q1 2025—a 1% year-over-year increase and the strongest first-quarter showing since 2016. Central bank buying, however, slowed to 244 tonnes, down sharply from 365 tonnes in the previous quarter.

Meanwhile, exchange-traded funds (ETFs) and tokenized gold products are gaining traction. Investment demand more than doubled to 552 tonnes, indicating rising investor interest in gold as a safe-haven asset amid market volatility. These inflows helped drive gold’s average quarterly price to a record $2,860 per ounce, up 38% year-over-year. Despite a recent 2.35% dip, spot gold remains strong, currently trading at $3,240—up 23.5% year-to-date.

While traditional sectors like gold jewelry faced a slump, falling to levels seen during the pandemic, physical bar and coin demand remained resilient, particularly in China. As institutional investors and crypto-native users flock to tokenized assets, gold-backed digital products are emerging as a key growth segment within the broader gold investment landscape.

This digital evolution in gold investing suggests a structural transformation, as new forms of ownership redefine how investors gain exposure to the precious metal.