Ongoing conflicts and political instability push investors toward stability. Gold acts as a traditional hedge against the erosion of currency purchasing power. Central banks, especially in countries like China, are accumulating record amounts of gold to diversify reserves away from the US Dollar.
A declining US Dollar and the expectation of lower Federal Reserve interest rates make non-yielding assets like gold more attractive compared to bonds or savings accounts.
PAX Gold ($PAXG ) is a digital asset built on the Ethereum blockchain where one PAXG token is backed 1:1 by one fine troy ounce of physical gold stored in a secure London vault.
It offers a superior alternative to traditional gold ownership. As global uncertainties rise, gold historically shines as a safe haven. While the broader crypto market experienced recent downturns, PAXG – mirroring physical gold's resilience – demonstrated remarkable stability.
But because of Liquidity Shortage in Exchanges, there can be major difference between actual Gold price and PaxGold price. This deviation is not a failure of the system, but a normal market signal for arbitrage traders. The price is not maintained by a single liquidity pool but by the guaranteed right to redeem for the physical asset. The ultimate deep liquidity is issuer's grantee to honor the 1:1 conversion. I will explain how arbitrage traders will self-correct the deviation in next post.
Looking at the charts, PAXG presents a robust technical picture. It's consistently trading above key moving averages, signaling a healthy and sustained uptrend. The clear message from the technical analysis is one of solid upward momentum, with key support levels holding firm.
The tokenized gold sector is no longer a niche concept; it's a rapidly expanding market that recently surpassed a $3 billion market capitalization with $PAXG being a leader. Keep an eye on the price of gold and PAXG's trading volumes – they could be signaling that digital gold is truly entering its bullish prime.
