Gold prices hit a new high, how to hedge against USD depreciation risk through XAUT

In the context of ongoing rising global economic uncertainties, investors are facing a common challenge: how to protect their assets during a continuous depreciation cycle of the US dollar. The performance of gold prices over the past year may hold the answer. As gold prices keep reaching new highs, an increasing number of crypto investors are considering how to allocate gold through digital assets, and the XAUT (Gold Token) issued by Tether has become an important solution to meet this demand.

Weakening US dollar drives continuous rise in gold prices, supported by multiple factors

Gold prices have an inverse relationship with the US dollar exchange rate. When the dollar weakens, dollar-denominated commodities like gold tend to rise. According to market data, spot gold in 2025 has shown an astonishing rally, increasing about 65% throughout the year, reaching a historic high of $4,549.96 per ounce, with over 50 new highs set during the year. Although gold prices experienced a phase of correction after entering 2026, the underlying momentum remains intact.

This wave of gold price increases is not accidental. According to the latest report from the World Gold Council, upcoming US Supreme Court rulings on tariffs, ongoing geopolitical conflicts (such as recent US developments in Venezuela), and the global “de-dollarization” trend are providing sustained support for gold prices. The World Gold Council notes that while these factors may cause short-term market volatility, the long-term upward logic of gold remains unchanged.

More importantly, global investor enthusiasm for gold assets has reached a historic high. In 2025, unprecedented capital flowed into global gold ETFs, with North America contributing the majority, and gold holdings in Asia nearly doubling. Meanwhile, silver also performed strongly, with an annual increase of about 150%, further confirming the robust demand for precious metals overall.

Top global investment banks like UBS are optimistic about the future of gold prices. UBS has raised its target prices for gold in March, June, and September 2026 to $5,000 per ounce (previously expected at $4,500), and predicts that by the end of 2026, gold prices will hover around $4,800 per ounce. These institutional views further confirm that gold still has room to rise in the new year.

Tether’s gold reserves are sufficient, making XAUT the best allocation option for crypto enthusiasts

For crypto investors, traditional physical gold allocation via conventional channels faces high barriers and limited liquidity. However, allocating gold through gold tokens like XAUT offers clear advantages.

As the world’s largest stablecoin issuer, Tether has the financial strength to support the credibility of XAUT. According to public data, Tether purchased 26 tons of gold in Q3 2025, bringing its total gold holdings to 116 tons, ranking among the top 30 global gold holders. Earlier this month, Tether CEO Paolo Ardoino announced the company purchased 8,888 Bitcoin, worth approximately $780 million, further demonstrating its strong capital backing. Currently, 15% of Tether’s quarterly profits are regularly allocated to Bitcoin, reflecting its emphasis on long-term asset allocation strategies.

XAUT, as a tokenized form of Tether Gold, is fully backed by physical gold stored in secure vaults. According to the latest market data, XAUT’s market capitalization has reached around $2.3 billion, with ample liquidity facilitating investor entry and exit.

Scudo launches to break allocation barriers, democratizing gold tokens

Traditional gold tokens face a fundamental issue: complex valuation units, requiring users to handle many decimal places during trading or pricing, which is not user-friendly for ordinary investors. Tether’s recent launch of a new accounting unit, “Scudo,” cleverly addresses this pain point.

According to official definitions, 1 Scudo equals one-thousandth of a troy ounce of gold, or one-thousandth of an XAUT, approximately $4.4. This innovative design reduces the entry barrier for gold tokens from hundreds of dollars to just a few dollars, making gold more practical in daily economic activities. The launch of Scudo does not alter the fundamental structure or backing of XAUT but provides a simpler valuation logic, enabling gold assets to transition from high-net-worth investors to the general public.

Four core advantages of allocating with XAUT

First, large market cap and ample liquidity. With a market cap of $2.3 billion, XAUT ensures deep trading liquidity, allowing investors to buy and sell relatively smoothly at any time.

Second, broad trading platform coverage. XAUT is listed on major centralized exchanges (CEX) such as Bybit, OKX, Bitget, and decentralized exchanges (DEX) like Uniswap, Fluid, Curve, enabling investors to choose their preferred trading methods.

Third, support for multiple operational modes. Investors can buy spot for long-term holding or use derivatives to leverage positions, catering to different risk tolerances.

Fourth, Tether’s dominant stablecoin position provides lasting support. According to Bloomberg citing Artemis Analytics, global stablecoin trading volume surged 72% in 2025, reaching a record high of $33 trillion. Among them, Tether’s USDT trading volume hit $13.3 trillion, and Circle’s USDC reached $18.3 trillion, accounting for the majority of stablecoin trading activity. As an industry leader, Tether’s market penetration, technological strength, and capital accumulation provide a solid foundation for XAUT’s development. Industry expectations suggest that Tether’s adoption will further increase in 2026.

Practical significance for ordinary investors

As the US dollar to RMB exchange rate continues to weaken, many ordinary investors with limited liquidity and lower risk appetite face the threat of fiat currency depreciation. In this context, moderately allocating part of their fiat into gold tokens like XAUT can allow participation in the rising global gold prices, while entering at relatively low thresholds (especially through the Scudo unit). This may represent a balanced asset allocation choice.

The core logic of gold investment is essentially hedging against the decline in fiat currency purchasing power. Against the backdrop of continuous central bank gold purchases, accelerating dollar depreciation, and rising geopolitical uncertainties, the upward trend of gold prices appears quite certain. Using XAUT to allocate gold enables this traditional asset allocation strategy to be upgraded into the digital age.

(This analysis is based on publicly available market data and institutional perspectives and does not constitute investment advice.)