Tether CEO Paolo Ardoino is promoting Tether Gold (XAU₮) as a lower-cost way to gain exposure to physical gold at a time when investors are pouring money into gold-backed exchange-traded funds.
In an Aug. 18 post on X, Ardoino said XAU₮ stands apart from traditional gold ETFs because it does not charge an ongoing custody fee. He also highlighted the physical gold backing each token and the project’s latest independent assurance report from KPMG US.
XAUT is the cheapest way to hold gold.
— Paolo Ardoino 🤖 (@paoloardoino) August 19, 2026
ETFs charge 50bps custody free.
XAUT has no custody fee.
And it's fully back by physical gold, now audited by KPMG US. https://t.co/GhSnpTUsrh
His comments come amid renewed demand for the precious metal. Global physically backed gold ETFs recorded $3.5 billion in inflows during the week ended Aug. 14, according to The Kobeissi Letter. That was their strongest weekly result since February 2026.
It was also the sixth consecutive week of net inflows. Over that period, investors added about $10 billion to gold ETFs, equivalent to roughly 72.2 metric tons of gold. Total holdings rose to 4,114 tons, their highest level since May.
Investors return to gold amid market uncertainty
Gold regained momentum in August after suffering a sharp sell-off earlier in the year.
Spot gold traded near $4,500 an ounce on Aug. 19 before easing as some investors took profits. The metal had climbed more than 3% that day as falling US bond yields and a weaker dollar made non-yielding assets more attractive, Reuters reported.
Demand has also been supported by geopolitical tensions and shifting expectations for US monetary policy. Concerns about inflation, rising government debt and the long-term stability of major currencies have kept gold firmly in focus.
Central banks remain significant buyers, but the latest ETF figures suggest demand is also picking up among institutional investors.
European funds led the most recent weekly inflows, attracting $2.3 billion. North American funds added $1.1 billion, while Asian funds received approximately $200 million, according to The Kobeissi Letter.
How Tether Gold works
XAU₮ is designed to offer ownership of physical gold through a blockchain-based token.
Each token represents one fine troy ounce of gold held in Tether Gold’s reserves. According to the company, the underlying bars meet the London Bullion Market Association’s Good Delivery standard.
Token holders can look up details about the gold allocated to their holdings, including bar serial numbers, purity, and weight. XAU₮ can also be divided into units as small as 0.000001 tokens, allowing investors to buy exposure to a fraction of an ounce.
Unlike a physical gold bar, the token can be transferred through supported blockchain networks. XAU₮ is currently issued as an ERC-20 token on Ethereum and a BEP-20 token on BNB Chain.
Tether Gold says it does not charge ongoing custody fees. However, buying or redeeming tokens through TG Commodities carries a one-time fee of 25 basis points. Users may also have to pay blockchain network fees when transferring tokens.
XAU₮ reserves top 707,000 ounces
Tether Gold’s latest available attestation offers a snapshot of the reserves behind the token.
According to Tether's Q1 report, its custodians held 707,747.139 fine troy ounces of gold, while 707,747.09 XAU₮ tokens were in circulation. Based on those reported figures, the outstanding supply was backed by slightly more than one ounce of gold per token at the reporting date.
The company valued the token supply at approximately $3.3 billion, using a gold price of $4,668.06 per ounce.
This structure allows investors to track the value of physical gold without arranging storage themselves. They can hold and transfer that exposure through crypto wallets and blockchain infrastructure.
XAU₮ and gold ETFs serve different markets
Gold ETFs remain one of the most widely used ways to invest in the metal, particularly among institutions and investors with traditional brokerage accounts. Their recent inflows show that demand for conventional gold products remains strong.
XAU₮ is aimed more directly at investors who already use digital assets and want to keep their gold exposure on-chain. It combines a link to physical bullion with features more commonly associated with cryptocurrencies, including wallet transfers and access to digital-asset markets.
Still, XAU₮ is not simply a blockchain version of a gold ETF.
ETFs are regulated financial products traded through stock exchanges and brokerage accounts. Tokenized gold operates within the digital-asset market and introduces different considerations, including issuer and counterparty risk, redemption requirements, blockchain fees and reliance on custodial arrangements.
For investors already comfortable with crypto infrastructure, XAU₮ may offer a convenient alternative to buying bullion or opening a position through a traditional brokerage. Others may prefer the regulatory framework, liquidity and familiarity of an ETF.
Dayo Paul
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