Tokenized Gold hits an all-time high in perp volume on Binance

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Tether Gold (XAUT), a tokenized gold asset, smashed its previous daily perpetual trading volume record on March 23 on Binance.

As XAUT traded at approximately $4,552 on March 25, its perpetual trading, a crypto derivatives product that allows traders to speculate on the price of gold without ever owning the actual asset, peaked on the largest cryptocurrency exchange by trading volume. On Monday, the XAUT perpetual volume on Binance spiked to $6.40 billion, thereby climbing to become the fifth most traded perpetual pair on the exchange, according to data from CryptoQuant.

Earlier this month, XAUT’s perpetual volume on this exchange hovered around $2 billion, representing a 220% increase to date. Historically, a significant rally in XAUT’s perp volume has coincided with the underlying price surge, potentially signaling a market rebound.

XAUT perpetual volume on Binance YTD. Source: CryptoQuant

Tokenized gold demand surge coincides with bearish sentiment

The notable surge in perpetual trading for tokenized gold on Binance has coincided with a cautious price outlook. Traders on Binance have been scrambling to gain exposure to gold and other precious metals, which have broadly been in a bull market over the past year.

However, XAUT’s price, which tracks that of physical gold, has signaled potential bullish exhaustion ahead of a possible market reversal. While geopolitical tensions in the Middle East have historically supported gold prices as a safe-haven asset, the current macro environment, in which global central banks signal no near-term rate cuts to combat inflation driven by elevated energy prices, has introduced headwinds that may weigh on gold’s near-term trajectory.

XAUT 30-day chart. Source: Finbold

During the past 30 days, the price of XAUT fell by 12.33% to reach $4,552 at press time. Over the past seven days, XAUT dropped a further 6.7%, reducing its market capitalization to approximately $2.5 billion, according to CoinMarketCap’s data.

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