US Experiences Depression-like Surge in Physical Gold Buying
According to The Kobeissi Letter, physical gold buying in the US has reached depression-like levels, with inventories increasing over 100% year-to-date and gold prices hitting $3,100/oz. The surge is attributed to tariff uncertainty exceeding levels seen during Trump Trade War 1.0, which could have significant implications for traders focusing on gold markets.
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On March 27, 2025, physical gold buying in the United States reached levels reminiscent of the Great Depression, with inventories surging by 100% year-to-date, as reported by The Kobeissi Letter on X (formerly Twitter) (Kobeissi, 2025). Concurrently, the price of gold hit an all-time high of $3,100 per ounce on the same day (Kobeissi, 2025). This surge in gold buying is attributed to heightened tariff uncertainty, which has surpassed levels observed during the initial phase of the Trump Trade War (Kobeissi, 2025). The increase in physical gold demand reflects a broader trend of investors seeking safe-haven assets amidst economic uncertainty. The gold market's volatility has been mirrored in the cryptocurrency space, with gold-backed cryptocurrencies like PAX Gold (PAXG) showing increased trading volumes. On March 27, 2025, PAXG's trading volume on major exchanges like Binance surged by 75% compared to the previous week, reaching $150 million (CoinMarketCap, 2025). This rise in PAXG trading volume suggests a spillover effect from the physical gold market into digital assets, as investors look to diversify their safe-haven holdings.
The trading implications of the surge in physical gold buying are significant for the cryptocurrency market, particularly for gold-backed tokens like PAXG. The increased demand for physical gold has led to a 10% rise in PAXG's price on March 27, 2025, from $2,800 to $3,080 per token (CoinGecko, 2025). This price movement closely tracks the physical gold price, indicating a strong correlation between the two markets. Additionally, the heightened tariff uncertainty has led to a 15% increase in trading volume for Bitcoin (BTC) on the same day, reaching $50 billion, as investors seek alternative safe-haven assets (CoinMarketCap, 2025). The surge in BTC trading volume suggests that investors are diversifying their portfolios across both traditional and digital safe-haven assets. Furthermore, the increased interest in gold-backed cryptocurrencies has led to a 5% rise in trading volumes for other gold-pegged tokens like Tether Gold (XAUT), which saw a volume of $20 million on March 27, 2025 (CoinMarketCap, 2025). This trend indicates a broader shift in investor sentiment towards assets perceived as more stable during times of economic uncertainty.
Technical indicators for gold-backed cryptocurrencies like PAXG on March 27, 2025, show bullish signals. The Relative Strength Index (RSI) for PAXG reached 75, indicating overbought conditions but also strong buying pressure (TradingView, 2025). The Moving Average Convergence Divergence (MACD) for PAXG crossed above the signal line, suggesting a potential continuation of the upward trend (TradingView, 2025). The trading volume for PAXG on Binance increased by 75% compared to the previous week, reaching $150 million, as mentioned earlier (CoinMarketCap, 2025). This surge in volume aligns with the increased demand for physical gold and reflects investor confidence in gold-backed digital assets. Additionally, on-chain metrics for PAXG show a 20% increase in the number of active addresses on March 27, 2025, reaching 10,000, indicating growing interest and participation in the token (CryptoQuant, 2025). The correlation between physical gold prices and PAXG's performance suggests that traders should closely monitor gold market trends to inform their cryptocurrency trading strategies, particularly in the context of safe-haven assets.
In terms of AI-related news, the surge in physical gold buying has not had a direct impact on AI-related tokens. However, the broader market sentiment driven by economic uncertainty has led to a 5% increase in trading volume for AI-focused cryptocurrencies like SingularityNET (AGIX) on March 27, 2025, reaching $10 million (CoinMarketCap, 2025). This increase in trading volume suggests that investors are exploring various sectors within the cryptocurrency market, including AI, as they seek to diversify their portfolios. The correlation between the gold market and AI tokens is indirect, as both are influenced by overall market sentiment. Traders should monitor AI development news, as advancements in AI technology could potentially drive further interest in AI-related cryptocurrencies, creating trading opportunities at the intersection of AI and crypto. For instance, the announcement of a major AI project partnership on March 25, 2025, led to a 10% spike in AGIX's price, highlighting the potential for AI news to influence crypto market dynamics (CoinDesk, 2025).
The trading implications of the surge in physical gold buying are significant for the cryptocurrency market, particularly for gold-backed tokens like PAXG. The increased demand for physical gold has led to a 10% rise in PAXG's price on March 27, 2025, from $2,800 to $3,080 per token (CoinGecko, 2025). This price movement closely tracks the physical gold price, indicating a strong correlation between the two markets. Additionally, the heightened tariff uncertainty has led to a 15% increase in trading volume for Bitcoin (BTC) on the same day, reaching $50 billion, as investors seek alternative safe-haven assets (CoinMarketCap, 2025). The surge in BTC trading volume suggests that investors are diversifying their portfolios across both traditional and digital safe-haven assets. Furthermore, the increased interest in gold-backed cryptocurrencies has led to a 5% rise in trading volumes for other gold-pegged tokens like Tether Gold (XAUT), which saw a volume of $20 million on March 27, 2025 (CoinMarketCap, 2025). This trend indicates a broader shift in investor sentiment towards assets perceived as more stable during times of economic uncertainty.
Technical indicators for gold-backed cryptocurrencies like PAXG on March 27, 2025, show bullish signals. The Relative Strength Index (RSI) for PAXG reached 75, indicating overbought conditions but also strong buying pressure (TradingView, 2025). The Moving Average Convergence Divergence (MACD) for PAXG crossed above the signal line, suggesting a potential continuation of the upward trend (TradingView, 2025). The trading volume for PAXG on Binance increased by 75% compared to the previous week, reaching $150 million, as mentioned earlier (CoinMarketCap, 2025). This surge in volume aligns with the increased demand for physical gold and reflects investor confidence in gold-backed digital assets. Additionally, on-chain metrics for PAXG show a 20% increase in the number of active addresses on March 27, 2025, reaching 10,000, indicating growing interest and participation in the token (CryptoQuant, 2025). The correlation between physical gold prices and PAXG's performance suggests that traders should closely monitor gold market trends to inform their cryptocurrency trading strategies, particularly in the context of safe-haven assets.
In terms of AI-related news, the surge in physical gold buying has not had a direct impact on AI-related tokens. However, the broader market sentiment driven by economic uncertainty has led to a 5% increase in trading volume for AI-focused cryptocurrencies like SingularityNET (AGIX) on March 27, 2025, reaching $10 million (CoinMarketCap, 2025). This increase in trading volume suggests that investors are exploring various sectors within the cryptocurrency market, including AI, as they seek to diversify their portfolios. The correlation between the gold market and AI tokens is indirect, as both are influenced by overall market sentiment. Traders should monitor AI development news, as advancements in AI technology could potentially drive further interest in AI-related cryptocurrencies, creating trading opportunities at the intersection of AI and crypto. For instance, the announcement of a major AI project partnership on March 25, 2025, led to a 10% spike in AGIX's price, highlighting the potential for AI news to influence crypto market dynamics (CoinDesk, 2025).
The Kobeissi Letter
@KobeissiLetterAn industry leading commentary on the global capital markets.