Tether's XAUT, a gold-backed token riding the wave of a bullish precious metals rally, has quietly outperformed the rest in a week where most of the crypto market has been stagnant.

As of Friday morning, XAUT has gained 4.2% over the past 72 hours, outperforming both Bitcoin and Ethereum, which have remained mostly rangebound. The surge comes as gold prices soared past $2,460 per ounce, fuelled by growing investor anxiety over inflation, trade wars, and central bank signals suggesting prolonged economic turbulence.

XAUT has become the go-to safe haven for digital asset traders seeking shelter from broader volatility, as it represents one troy ounce of physical gold held in Swiss vaults. And for good reason, unlike algorithmic stablecoins or speculative tokens, its value is directly tied to a hard asset with centuries of trust behind it.

“Crypto traders are looking for a parking spot that isn’t USD-pegged,” explains Alina Cheng, a market strategist at StableYield. “When Bitcoin isn’t moving and ETH’s underperforming, assets like XAUT offer protection while staying in the blockchain ecosystem.”

Institutional interest in XAUT has also picked up, with large wallets transferring the token to cold storage, signalling longer-term confidence. Meanwhile, DeFi protocols integrate XAUT as collateral to stabilise lending pools amid price swings in other altcoins.

The rise of gold-pegged tokens also points to a shift in investor mindset less about 10x returns and more about wealth preservation. As the market matures and geopolitical pressures grow, digital gold may prove just as alluring as its physical counterpart.

Other commodities-linked tokens like Paxos Gold (PAXG) have also posted gains, but none as strong as XAUT, which now leads the week’s top performers by market cap percentage.

With U.S.–China tensions escalating and the Federal Reserve holding its cards close, traders are preparing for a long, choppy summer. Based on this week's performance, Tether's XAUT could potentially be the undervalued investment of 2025.