The price of gold continues its rapid ascent amid the escalating conflict between the US, Israel, and Iran. On March 2, 2026, the spot price reached $5,394 per ounce — its highest level since January 30. Meanwhile, tokenized gold assets XAUT and PAXG recorded daily trading volumes exceeding $1 billion, becoming the primary hedging instrument in the crypto ecosystem.
Why Gold Is Rising
The primary catalyst for the current rally is the escalation of the Middle East military conflict. Following US and Israeli strikes on Iran on February 28, investors moved capital en masse into safe-haven assets. April gold futures closed at $5,247.90, while the spot price on March 2 rose another 2%, reaching an intraday high of $5,394.
Additional pressure comes from the macroeconomic environment: the US Producer Price Index (PPI) for January rose 0.5% month-over-month versus the expected 0.3%, while the annual figure reached 2.9% instead of the forecast 2.6%. Inflationary concerns are pushing traditional investors toward precious metals.
Tokenized Gold as a Crypto Hedge
Crypto whales redirected capital from Ethereum and stablecoins into gold tokens. According to analytics platform Lookonchain, one dormant wallet spent $1 million USDC to purchase PAXG and XAUT. Abraxas Capital Management received 28,723 XAUT tokens worth $151 million directly from Tether's treasury.
Why Tokens Over Physical Gold
Tokenized gold offers investors the advantage of 24/7 trading, instant settlement, and minimal entry thresholds. Unlike traditional exchange-traded funds (ETFs), PAXG and XAUT are accessible from anywhere in the world without requiring bank accounts or brokers.
The tokenized gold sector has already exceeded $6 billion in market capitalization and over the past week has shown growth outpacing the physical metal. Analysts attribute this to the weekend effect: while traditional markets are closed, crypto tokens remain the only liquid way to gain gold exposure.
Bitcoin as Digital Gold — Not This Time
Notably, the narrative of Bitcoin as digital gold failed to hold this time. While physical gold was setting records, BTC crashed to $63,000. According to Jan3 CEO Samson Mow, Bitcoin is trading 24–66% below its historical trend relative to gold and the global money supply, which could indicate significant undervaluation.
At the same time, the divergence between gold and Bitcoin reflects the current nature of the market: during moments of panic, investors choose proven safe-haven instruments over highly volatile crypto assets.
Outlook
If geopolitical tensions do not subside, the gold price could test the $5,500 level and beyond. For the tokenized sector, this means continued volume growth and new capital inflows. CCN analysts do not rule out gold moving toward $6,000 per ounce in the event of a prolonged conflict, making XAUT and PAXG even more attractive for crypto investors.
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