Pax Gold is an Ethereum-based stablecoin that is pegged to the price of gold. More specifically, each PAXG token is backed by an amount of physical gold. Launched in 2019 by New York-based trust company Paxos Standard, Pax Gold is an ECR-20 token that seeks to make trading in gold accessible to traders who are new to the commodity. The goal being to overcome the minimum buy limits and hefty purchase and transaction fees that are often a barrier to buying and trading in physical gold.

Each Pax Gold coin, PAXG, has rights to a specific troy ounce of allocated gold with its own unique serial number that is held in storage by Brink’s of London. Allocated gold means that the token has rights over specific gold bars, rather than a general entitlement to a given quantity of gold. The price parity is maintained by the PAXG token or tokens being burned every time there is a redemption for the gold they represent. The users’ gold holdings are additionally secured by the fact that Paxos is a trusted company fully regulated by the New York Financial Services Department that’s also bankruptcy-remote – i.e. customer assets are held separately from company assets.

We have put together everything you need to know in order to get a better understanding of Pax Gold (PAXG) price and how it has performed in the past.

Pax Gold Price History

When it opened on exchanges in Q3 of 2019, Pax Gold price was initially stable at around the $1,500 mark. By the end of the year, however, it began breaking out of its resistance lines and embarked upon a gradual ascent in the early days of 2020. The occasional pullback excepted, this upward curve broadly continued throughout the first half of 2020, culminating in PAXG reaching its peak in early August at just over $2,000.

This peak came on the back of a surge in demand for gold, driven in part by fears over the COVID-19 pandemic and pushed to record highs by the activities of personalities such as Warren Buffet, who invested heavily in a Canadian gold miner at the time.

Following this mid-2020 peak, the price of PAXG retreated back below $2,000 for the remainder of the year before spiking through this threshold again in January 2021. Weakening demand for physical gold depressed the price again over the next few months and, despite predictions to the contrary, PAXG price has mostly remained below $2,000 since.

A sharp increase in trading volume briefly pushed PAXG price up past $1,900 from mid-May to mid-June 2021 but demand reduced again and the price has been stable at about $1,800 since then.

Analyzing Pax Gold Price History

[guidelink paxg] price history can be analyzed with many of the same techniques as commodities markets. Technical analysis involves using various indicators while studying price charts in order to make sense of previous price movements. With Pax Gold, as with many other tradable assets, large price swings are often accompanied by spikes in trading volume, as a large number of traders buy or sell their coins on exchanges. Because the price is pegged to gold, many of the technical analysis indicators traders use to chart PAXG prices will overlap with those used by commodities traders.

Fundamental analysis, on the other hand, looks at the drivers behind the supply and demand of a commodity, as well as the state of the wider market and economy. Almost all of PAXG’s historical price action was driven by the price of gold on international markets, rather than the crypto markets as is the case with most cryptocurrencies.

The main peaks of PAXG value that took place in mid-2020 and early 2021 were directly linked to equivalent spikes in the price of gold. Likewise, when PAXG price drops, this corresponds to a drop in demand for and the price of gold.

Factors Influencing the Price of Pax Gold

Since the price of PAXG closely correlates with the price of physical gold, many of the fundamentals driving price movement will be the same. As a result, traders will want to look at investment demand for gold driven by central banks or by large exchange-traded funds. Additional demand drivers include global jewelry demand and technology or industry-led demand since gold also has practical applications.

A more dramatic factor influencing the price of gold, and therefore Pax Gold, is the tendency to use it as a store of value and a means of wealth protection in times of political and economic turmoil. Gold is seen as a safe haven for investors in times of strife when predictive techniques break down. As such, it can see sharp spikes in demand, such as during the early waves of the coronavirus pandemic when gold reached all-time highs.

Another factor to watch for when analyzing the price of gold and PAXG is the value of the US dollar. Gold is heavily dollar-dominated and is often seen as a way for investors to hedge against inflation. This is because gold is, all else being equal, inversely related to the value of the dollar – a strong dollar tends to depress the value of gold and vice versa – hence as inflation increases, so does the price of gold.

Live Pax Gold Value and Market Cap

The market price of Pax Gold varies from moment to moment as it’s dictated by the balance of buyers and sellers on exchanges, which is in constant flux.

The market cap of Pax Gold is equal to the market price of PAXG multiplied by the number of PAXG in circulation, and hence also varies from moment to moment.

Pax Gold Price FAQ

How is the Price of Pax Gold Calculated?

The price of Pax Gold at any given moment is decided by the balance of supply and demand in the gold markets. When more people are buying gold than selling it, the price goes up, and when more are selling than buying, the price goes down. This directly correlates to the price of Pax Gold on crypto exchanges

What Will Pax Gold Be Worth in the Future?

It is, of course, impossible to make price predictions with any kind of absolute certainty, as a whole host of different factors could play a role in determining the future Pax Gold value. However, as gold is seen as a safe haven asset and a hedge against inflation, future economic uncertainty and more US dollars being printed could drive demand for gold and hence push up the price of PAXG.

Why is the Price of Pax Gold Different on Different Exchanges?

Pax Gold price is linked to the price of gold on international markets. At the same time, the price of PAXG is affected by trading on exchanges and there is no standard global Pax Gold price, so no one knows what it is “supposed” to cost. The trading volume and liquidity are different for each exchange and those differences are what affect the price.

Can You Purchase Fractional Amounts of the PAXG Token?

Yes, you can. One of the goals of the Pax Gold project is to reduce barriers to trading gold and, as such, fractional amounts are available, with the PAXG coin being divisible out to 18 decimal places. If you are buying directly from Paxos, however, the minimum purchase amount is 0.01 PAXG.

What Are On-Chain Fees?

Traders will be subject to two kinds of fees when sending PAXG from one ERC-20 address to another as this represents an on-chain transaction that is recorded on the Ethereum blockchain. The two fees are a standard gas fee to pay for the computing power Ethereum requires to record the transaction and a fee of 0.02% charged by PAXG for the on-chain transaction.

Conclusion

The price of Pax Gold has correlated well with the price of gold during its history of trading on crypto markets, even though this journey has taken it through some of the most volatile times in the global gold price. This suggests that Paxos Standard has done a good job of creating a stablecoin that makes it easier for people to get into gold trading. This could mean that PAXG has a bright future as a store of value that has one foot in the crypto sphere and one in the ‘real world’. 

If you want to get started with the most user-friendly trading experience on the market, register with Kriptomat today to begin your journey into the world of Pax Gold and other cryptocurrencies!