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Pax gold price prediction: Is it a goldmine?

By Capital.com Research Team

16:53, 10 August 2022

Pax gold logo on a gold coin with bullish and bearish signals
Every PAXG token is backed by one troy ounce of physical gold, which is stored in a London vault – Photo: Adisak Riwkratok / Shutterstock

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:

“The main goal behind pax gold is to make gold more tradable, as the physical commodity is not easily divisible or flexible in terms of transport. This is why Paxos Standard decided to create a cryptocurrency entirely backed by gold.”

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

DOGE/USD

0.12 Price
-4.060% 1D Chg, %
Long position overnight fee -0.0753%
Short position overnight fee 0.0069%
Overnight fee time 21:00 (UTC)
Spread 0.0012872

BCH/USD

386.45 Price
+2.080% 1D Chg, %
Long position overnight fee -0.0753%
Short position overnight fee 0.0069%
Overnight fee time 21:00 (UTC)
Spread 2.50

BTC/USD

63,620.20 Price
-1.480% 1D Chg, %
Long position overnight fee -0.0616%
Short position overnight fee 0.0137%
Overnight fee time 21:00 (UTC)
Spread 106.00

XRP/USD

0.57 Price
-9.530% 1D Chg, %
Long position overnight fee -0.0753%
Short position overnight fee 0.0069%
Overnight fee time 21:00 (UTC)
Spread 0.01168

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.

FAQs

How many pax gold coins are there?

As of 10 August, there was a circulating supply of 339,687.17 PAXG, according to CoinMarketCap.

Is pax gold a good investment?

Pax gold is making investing in the traditional commodity more accessible through the use of cryptocurrency technology. Investors are no longer restricted by a minimum amount, limited settlement hours, or custody fees. However, it does carry the same risks as investing in gold or cryptocurrencies.

In volatile cryptocurrency markets, it is important to do your own research on a coin or token to determine if it is a good fit for your investment portfolio. Whether the PAXG token is a suitable investment for you depends on your risk tolerance and how much you intend to invest, among other factors. Keep in mind that past performance is no guarantee of future returns. And never invest money that you cannot afford to lose.

Will pax gold go up?

At the time of writing some forecasters, like TechNewsLeader, expected rapid growth for the gold-backed cryptocurrencies. However, WalletInvestor suggested it was a bad investment and could fall over the next year.

In volatile cryptocurrency markets, it is important to do your own research on a coin or token to determine if it is a good fit for your investment portfolio. Whether pax gold is a suitable investment for you depends on your risk tolerance and how much you intend to invest, among other factors. Keep in mind that past performance is no guarantee of future returns. And never invest money that you cannot afford to lose.

Should I invest in pax gold?

PAXG is giving investors exposure to the gold asset through an ether token. As it mirrors the price of the traditional commodity, investors should bear in mind the state of the gold market.

Whether you should invest in pax gold is a question that you will have to answer for yourself. Before you do so, however, you will need to conduct your own research and never invest more money than you can afford to lose because prices can go down as well as up.

 

Markets in this article

Gold
Gold
2444.86 USD
-14.15 -0.580%

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