PAX Gold price prediction: Can PAXG sustain its value?

Future prospects of the gold-backed cryptocurrency could depend on geopolitical factors

Stacks of gold bars among a 3D stock chart – Photo: Shutterstock                                 
Tokenised gold presents a range of benefits for traders – Photo: Shutterstock
                                

Contents

PAX Gold is a digital asset pegged to the value of the gold commodity. The ERC20-compliant cryptocurrency was launched in September 2019 by Paxos, a regulated blockchain infrastructure company with a board that includes Sheila Bair, former chair of the Federal Deposit Insurance Corporation (FDIC).

In the following guide, we look at the key aspects of this synthetic asset, before diving into the PAX Gold price prediction. Considering an investment? Then keep reading below.

What is PAXG?

Before assessing the PAXG price prediction, let’s take a deeper look into PAXG. As a synthetic asset, PAXG is backed by real gold bars held in custody by the Paxos Trust Company, an organisation regulated by the New York State Department of Financial Services. When users buy this digital gold asset, their fiat is stored in a Loco London unallocated gold account until redemption. Interestingly, If customers hold more than 430 oz in PAX Gold, they can redeem their tokens for a physical gold bar.

But what is PAX Gold (PAXG) offering that a major gold exchange-traded fund (ETF) does not? Quite a bit, it seems. Firstly, PAX Gold does not charge custody fees and settlement times are instant. Furthermore, the threshold for entry is far lower at 0.01 troy ounce versus one troy ounce for many ETFs. But PAXG is not feeless. Charges are implemented at the buying and selling stages, while a 0.02% tax on all on-chain transactions over Ethereum is also implemented.

Paxos states that all PAXG is backed 1:1 by gold bars. Customers can choose between allocated and unallocated gold bars. When a customer trades for allocated gold bars, they receive rights to a specific bar, identified by a unique serial number, while unallocated gold bars are fungible.

Paxos also runs the popular Pax Dollar (USDP) regulated stablecoin. Paxos releases monthly attestation reports conducted by auditing firm Withum. These reports show that PAXG has been fully backed since the token launch in September 2019.

PAXG tokenomics

PAX is currently valued at $1,972 (£1,512) with a circulating supply of 306,948. Since PAXG is minted on user demand, there is no maximum supply and the token is fully diluted with a market capitalisation of $605.46m. A recent trading volume of $85.27m was equal to 14% of market cap.

On the open markets, PAXG is supported by many major exchanges, including Binance, FTX and Kraken. The Uniswap decentralised exchange (DEX) also has a range of user-generated liquidity pools. 

Price action: Is a reversal due?

The price of gold has rallied since Russia’s widely condemned invasion of Ukraine in February, as investors turned to the commodity as a safe-haven asset. Consequently, PAXG entered a noticeable uptrend from 1 February after channelling sideways from as far back as June 2021.

PAXG climbed 4.8% from $1,808.42 to $1,896.83 throughout February. The uptrend became steeper in March, with the price rising 8.4% come 8 March. But a bearish engulfing pattern was observed on the following day, indicating a possible reversal of the uptrend.

Stock chart of the gold commodity – Source: Currency.com
Gold is trading well above the trend line… for now – Source: Currency.com

The relative strength index (RSI) could attest to a possible reversal. An RSI reading of 76.5 on 8 March indicated an overbought position, suggesting that PAXG cannot sustain these prices. On 11 March, the token dropped below the $2,000 barrier. Now onto the PAX Gold price prediction coverage to see what might happen next.

From the forecasters

Since PAXG’s value is pegged to gold, price targets for the gold commodity can help us to make a PAX Gold price prediction for 2022 and further ahead. According to analysis by Capital.com, many forecasters are bearish on gold’s prospects in the years ahead, noting that short-term gains could easily be reversed once geopolitical driving forces dissipate. 

On the other hand, stagflation could prove “a very positive macroeconomic backdrop for gold… With few other options for diversifying portfolios, we believe that gold is well on its way to becoming the ‘TINA’ (there is no alternative) safe-haven asset in coming years,” according to James Luke of Schroder Investment Management Australia.

Wallet Investor is of the moderately bullish persuasion, offering a PAXG coin price prediction of $2,299 over 12 months and $3,541 over five years, suggesting potential returns of 86.6% if bought today.

The PAX Gold price prediction for 2025 at Digitalcoin is $3,722.45 for the middle of the year, suggesting that investors could almost double their profits by this time.

PAXG could give investors 35-times returns according to PricePrediction’s PAX Gold price prediction for 2030. The 2025 price target is a bullish $8,776.68.

Keep in mind that these price targets are speculative and should not be used as the sole means for making an investment decision. Currency.com recommends extensive research on the token, the Paxos company, and the future prospects of the gold commodity.

FAQs

That figure changes depending on user demand. A recent reading showed a circulating supply of 306,948 PAXG.

PAXG could be a good investment. As a synthetic asset, it allows you to own gold in tokenised form. But the project also comes with risks. It is recommended to keep checking Paxos’s monthly attestation reports to make sure that the token is fully backed by gold bars.

PAX Gold price prediction forecasts are mixed. PAXG is pegged to the price of gold, a commodity that fluctuates in value in response to geopolitical developments. Some forecasters believe that gold could reduce in value in the years ahead, while others are more bullish. Currency.com recommends consulting an independent commodities expert before investing.

You should make your own PAXG price prediction following extensive research on the token, the Paxos parent company, and the future prospects of the gold commodity. Never invest with more than you can afford to lose.

Further reading

The material provided on this website is for information purposes only and should not be regarded as investment research or investment advice. Any opinion that may be provided on this page is a subjective point of view of the author and does not constitute a recommendation by Currency Com Bel LLC or its partners. We do not make any endorsements or warranty on the accuracy or completeness of the information that is provided on this page. By relying on the information on this page, you acknowledge that you are acting knowingly and independently and that you accept all the risks involved.
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