Tokenized commodities have scaled to roughly $3.9–$4.2 billion, with tokenized gold representing more than 80% of the market. This expansion is moving in tandem with spot gold, which has cleared $4,530 per ounce and is up nearly 65% year-to-date, tightening the linkage between on-chain bullion tokens and physical-market dynamics.
Market trackers place the sector at about $3.9 billion to $4.2 billion, reflecting an 11.5% increase over the past 30 days and almost $3 billion of growth since the start of 2025, based on industry reporting. The pace and concentration of that growth make tokenized commodities an increasingly relevant segment for institutional monitoring and treasury positioning.
Market structure and what is driving the move
Within the category, Tether Gold (XAUT) and Paxos Gold (PAXG) dominate the capital base. XAUT is reported around $1.7–$2.24 billion and PAXG around $1.5–$1.6 billion, together representing roughly 80–89% of tokenized-commodities market value, with each token backed 1:1 by physical gold reserves.
The rally is closely aligned with strength in the underlying metal, as spot gold has pushed to new highs above $4,530/oz amid overlapping macro drivers. Coverage attributes the move to persistent geopolitical tensions, expectations of U.S. Federal Reserve rate cuts that lower the opportunity cost of non-yielding assets, and additional support from central-bank purchases alongside a softer U.S. dollar. Market commentary and price models referenced in recent reporting also outline upside scenarios reaching $4,800/oz by late 2026, extending the runway for tokenized gold demand if those drivers persist. That forward curve matters because it anchors both investor sentiment and product-roadmap prioritization for on-chain commodity rails.
Operational considerations and risk framing for tokenized gold
On-chain demand for gold tokens benefits from the physical market’s momentum, and the 1:1 reserve model reduces a specific class of counterparty risk versus unbacked digital assets. However, the structure still carries material exposure to custodial counterparty failure, audit gaps, and smart-contract vulnerabilities that can impair confidence even when the metal price is supportive.
Tokenized gold also offers a liquid and divisible exposure that can be operationally attractive where on-chain settlement or composability is part of the strategy. Institutional treasuries evaluating tokenized commodities should weigh custody arrangements, audit frequency, and regulatory treatment against the benefits of programmable settlement and 24/7 market access.
Risk monitoring should be explicit and metrics-driven given the sector’s concentration and its dependence on both on-chain and physical liquidity. Key indicators include market-cap concentration in the top two tokens, audit transparency around physical reserves, and the correlation between token liquidity and spot-market liquidity during stressed conditions.
Tokenized commodities are now firmly in the low-single-digit billions, and the category’s trajectory is being led by gold’s exceptional 2025 performance. The immediate takeaway for institutional stakeholders is that growth is real, but the operational control framework must scale at the same pace as market capitalization.