Pax gold price prediction: Is it a goldmine?

PAXG is giving investors an easier and more accessible method to invest in gold. Customers are no longer restricted by banking hours, large minimum investment amounts or custody fees.

Yet just like the commodity, pax gold could find it difficult to escape the bearish signs from the wider economy with hikes in interest rates at a 26-year high.

PAXG/USD chart

What is pax gold (PAXG)?

Stablecoins are cryptocurrencies that copy a fiat or traditional asset, usually the US dollar. But the market is becoming more diverse with different options available to investors, like the Japanese yen or British pound. As the name suggests, pax gold is a stablecoin that is pegged to the price of gold.

The gold-backed cryptocurrency is based on the Ethereum blockchain as an ERC-20 token. This allows it to be tradable on a range of exchanges and helps it achieve its accessibility mission.

The stablecoin’s entry on CoinMarketCap says:

There are various different ways that pax gold is more accessible than other investment routes, like an exchange-traded fund (ETF). PAXG is available to trade everyday at all hours, rather than traditional gold that must be settled during business hours.

Pax gold also has a lower barrier to entry. Investors can buy a minimum amount of just 0.01 PAXG, which is roughly equivalent to $15 worth of gold. This opens up the market to retail customers looking for a smaller exposure to the asset

The Ethereum token is the product of the Paxos company, which has previously released its own US dollar stablecoin, USDP. Charles Cascarilla is the New York-based co-founder and chief executive officer of the company, who has 20 years of experience in the financial industry.

How does pax gold work?

Every token of pax gold is backed by one fine troy ounce of a physical London Good Delivery bar, a gold standard that is made up of between 370 and 430 ounces.

After launching in 2019, the auditing firm Withum conducts monthly attestation reports. These confirm that the PAXG tokens are backed by the same amount of troy ounces.

The gold bars are stored in “professional vaults in London”, meaning any investor who owns PAXG has ownership rights over the gold bar.

If customers hold more than 430 ounces of pax gold, they can redeem their tokens for the physical gold bar. Investors can also find out the serial number and other characteristics of the bar by inputting their wallet address.

PAXG’s price history

PAX Gold price chart

_{Source: CoinMarketCap}

As it is backed by gold, PAXG has closely mirrored the price of the traditional commodity since going live in September 2019 – with an opening price of $1,522.97 on 26 September, according to CoinMarketCap.

Gold saw success earlier this year as many turned to the asset as a safe haven when Russia invaded Ukraine on 24 February. A few weeks later, PAXG reached a high of $2,071.93 on 8 March 2022.

However, the price of gold came crashing down as high inflation rocked the wider economy with banks raising inflation. PAXG fell to an almost two year low in July when it slipped below $1,700 to a daily low of $1,682.07 on 21 July.

As of 10 August, pax gold was trading at $1,789, up 1.39% on the previous seven days, and it was ranked 74th among the cryptocurrencies on CoinMarketCap.

Pax gold price prediction

At the time of writing, the forecasts over the price of gold were conflicting. A potential recession was argued by some as a supportive force for the commodity. Yet, potential gains could be undone by another increase in interest rates.

When it came to a PAXG price prediction, forecasters presented a range of outlooks. First, WalletInvestor described it as a “bad” long-term investment and expected it to fall to $1,783.50 in a year. Its pax gold price prediction for 2025 anticipated it may have climbed to $1,798.29 by the end of the year.

DigitalCoinPrice was much more optimistic with its predicted pax gold price prediction for 2022 having averaged out at $2,343.26. It thought it would easily pass $3,000 in 2025 and achieved an average of $3,422.35 before it went on to $8,212.09 by 2030.

Similarly, PricePrediction said PAXG would have jumped to $1,990.37 this year and $3,037.58 in 2023. Its pax gold price prediction for 2030 gave the stablecoin a staggering price of $46,637.09.

The TechNewsLeader PAXG coin price prediction suggested it would have climbed above $2,000 this year and achieved $2,369.91. From there, it went on and predicted PAXG might have hit $10,060 in 2026. By the beginning of the next decade, it anticipated the gold-backed token might have risen to a maximum price of $41,884.58.

When considering a PAXG token price prediction, it’s important to keep in mind that cryptocurrency markets remain extremely volatile, making it difficult to accurately predict what a coin or token’s price will be in a few hours, and even harder to give long-term estimates. As such, analysts and algorithm-based forecasters can and do get their predictions wrong.

If you are considering investing in cryptocurrency tokens, we recommend that you always do your own research. Look at the latest market trends, news, technical and fundamental analysis, and expert opinion before making any investment decision. Keep in mind that past performance is no guarantee of future returns. And never trade with money that you cannot afford to lose.

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