Crypto Minting Backed by Gold Reaches Highest Volume in Three Years Amid Falling Central Bank Demand

The gold market is undergoing a transformation, driven by a shift from central bank purchasing to increasing demand from exchange-traded funds (ETFs) and gold-backed cryptocurrencies. The minting volume of gold-backed tokens has recently hit a three-year high, signaling growing investor interest in digital assets linked to the precious metal.

Recent data from rwa.xyz reveals that over $80 million worth of gold-backed tokens were minted in the last month alone. This influx pushed the market capitalization of gold-backed tokens up 6%, reaching $1.43 billion, while the monthly transfer volume surged by 77% to $1.27 billion. This surge reflects a reinvigorated market for tokenized gold as more investors seek to enter the digital gold space.

This uptick in digital gold activity mirrors broader trends within the gold market. The latest World Gold Council report shows that global gold demand in Q1 2025 reached 1,206 tonnes, marking a 1% year-over-year increase and the strongest first quarter in nearly a decade. However, the slowdown in central bank purchases has become evident, with central banks acquiring only 244 tonnes, a sharp decline from the 365 tonnes bought in the previous quarter.

ETFs have played a pivotal role in this change, with investment demand more than doubling to 552 tonnes. The increase reflects a significant move toward gold as an investment asset, especially as traditional central bank demand has slowed. This shift helped propel the average quarterly gold price to a new record of $2,860 per ounce, marking a 38% increase from the previous year.

Despite these gains, gold prices experienced a slight dip of 2.35% last week, following a 23.5% rise year-to-date. Meanwhile, risk assets, including cryptocurrencies, showed positive momentum. Spot gold is currently trading at $3,240.

While traditional demand for gold, particularly in the form of jewelry, fell to pandemic-era lows, demand for gold bars and coins remained robust, especially in China, where investors continue to view gold as a secure hedge against economic uncertainty.