ROSS NORMAN : Turning gold digital ?
I can remember 10 years ago when Dieter Zetsche the CEO of Daimler Benz said that he feared competition from the likes of Apple and Google, rather than traditional rivals Audi or BMW. At the time it seemed fanciful if not delusional. But it was prescient.
Zetsche's comments recognized a broader shift in the technology landscape that has the potential to disrupt even the most stable 'bricks and mortar' businesses. My question is … is the same going to happen to gold ?
Back in 2002 the gold market saw the most epic transformation when it shifted its focus from jewellery promotion and invested in a novel product called the ETF. By forging a new conduit between the institutional investment community and direct access to the gold market, it was a major contributory factor to a decade long double digit gain in gold prices, with prices rising from $280 to $1670. Arguably, although impressive, it still missed the 'mother lode' in not making gold universally available and fungible to ALL investors.
We always knew that bitcoin was modelled on the shape and structure of the gold market and there was strong DNA between the assets. We also supposed that the two markets might share the growing wish or need for an independent and digital form of money as trust in fiat declined. The professional gold market was slow to embrace the powerful tech despite efficiency gains maybe because of reputational concerns (early days the crypto space was a bit slack in terms of AML and KYC). And the modest uptake of gold-backed tokens marketed by independents seemed to validate that decision. Back in 2023 the total amount of gold accumulated in tokens was less 1% of one years gold demand. It didn't even warrant a footnote. Go about your business … nothing to see here.
But Zetsche's observations remain. Maybe the slow uptake in the fusion of tech and our very traditional market was just a question of timing.
I rarely remark about specific companies (or people) … not my place … but today on MetalsDaily.com you will see several news references to the recent rapid uptake in gold-backed real world assets. Specifically Tether, PaxGold and Matrixport (apologiesd to others not named).
What caught my eye was Tether becoming tethered to Cantor Fitzgerald – neither traditional players in bullion - with a $1.1 billion financing initiative. It is the kind of out-of-left-field thing that just might signal a seismic shift. Two things stand out … the size of the investment … and the credibility and distribution that Cantor brings to the deal as a mid-sized investment bank with a global footprint. If Tether significantly expands XAUT issuance with Cantor as its broker and its large distribution and liquidity channels, then this could become self-fuelling. It will also be interesting to see how market leader Paxos responds with its own gold-backed token PAXG.
Above all this is about uptake, trust and transparency.
For sure there will always be many questions when a traditional financial firm links up with an offshore stablecoin issuer, but this is probably worth watching. My sense is the timing is quite good.
As the image below shows, tokenized gold is still very modest compared to the major gold ETFs in terms of AUM, but in the second quarter of 2025 it is outpacing ETFs in growth, rising from $2.4b to $19.2b according to CEX.IO – an eightfold increase – driven by retail demand – the "mother lode". PAXG also reportedly saw a significant 25% increase in the period.
In the short term this is unlikely to have a dramatic impact on gold prices, but we thought that too back in 2002. Turning gold into a digital asset doesn’t change its nature — it changes its accessibility.
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Ross Norman
CEO
Metals Daily
www.MetalsDaily.com
ross@metalsdaily.com