Driven by a surge in risk-aversion sentiment, the spot gold price has frequently hit new highs. As of April 17, the spot gold peaked at $3,350 per ounce and now trades at $3,300 per ounce. With a year-to-date gain of 39%, gold stands out as he only resilient hard asset in the current economic cycle.
Drivers Behind Gold's Surge
From escalating Middle East tensions and the ongoing Russia-Ukraine war to ballooning U.S. deficits and expectations of a weaker dollar, gold has emerged as the ultimate safe-haven asset. On April 17, Federal Reserve Chair Jerome Powell delivered a public speech, stating that recently implemented tariff policies expected to push short-term inflation higher and drag down economic growth. Consequently, the Federal Reserve will adopt a "wait-and-see" approach to strike a balance between maximum employment and price stability. As Powell’s statement contradicted market expectations of a rate cut, global equity markets generally declined following the news, while gold futures prices rose.
Central banks’ continued gold accumulation and ETF inflows are providing long-term support for gold prices, while global risk-aversion sentiment is fueling short- to mid-term momentum. After all, physical gold does not rely on any nation's credit, remains unaffected by financial system risks, and retains value during wars, inflation, and economic crises.
In light of this, Goldman Sachs' latest report has raised its forecast, suggesting that the gold price is likely to set new records by year-end and may reach $4,000 per ounce next year.
How to Maximize Returns When Investing in Gold?
Compared to traditional physical gold or gold jewelry, Matrixdock's gold token, XAUm, offers clear advantages, catering to both risk-aversion and investment needs.
Matrixdock’s gold token, XAUm, is 1:1 pegged to physical gold, backed by 100% LBMA-certified physical gold, and stored in top global vaults, including Brink’s and Malca Amit. There is no need to worry about the transparency of gold reserves; XAUm provides users with monthly on-chain proof of assets and quarterly audits by Bureau Veritas, the same auditing institution used by GLD.
By combining the high liquidity with the asset properties of gold, XAUm achieves efficient and transparent circulation. XAUm not only supports offline redemption of physical gold but also allows holders to use it as collateral, maximizing capital utilization.
Upgraded Use Case: On-Chain Lending with XAUm Significantly Boosts Capital Efficiency
After holding gold tokens, users can choose to use on-chain lending based on their situation to boost capital efficiency, bringing gold assets to “life”. Currently, XAUm is listed on Uniswap, PancakeSwap, and Kinza Finance for collateralized lending. XAUm holders can pledge their XAUm to borrow stablecoins for other investment activities.
Example 1: Repeatedly Using XAUm as Collateral to borrow stablecoins and Increase Gold Exposure
Mike pledges XAUm worth 10,000 USDT on Uniswap and borrows stablecoins, which he then uses to purchase XAUm. If Mike repeats the collateralized lending process four times, with a borrowing rate of 50%, the situation for each round of collateralized lending is as follows:
pegge to the price of gold, with relatively stable price fluctuations, reasonable operations will enable Mike to hold gold assets at a level close to 200% of his initial cost.
Example 2: Using XAUm as Collateral to Unlock Liquidity and Enhance Capital Utilization
Mike pledges XAUm worth 10,000 USDT on Uniswap and borrows stablecoins (USDT) at a borrowing rate of 50%, providing Mike with 5,000 USDT of liquidity.
Based on market conditions, Mike can engage in various investment activities, such as purchasing a 30-day fixed-income product worth 5,000 USDT with an annualized yield of 5.2% (data from the Matrixport APP, as of April 17). Alternatively, he can explore more on-chain investment opportunities to achieve excess returns, while managing risk appropriately.
The examples provided above are for informational purposes only and do not constitute any investment advice. Readers should carefully evaluate their risk tolerance and needs, and invest prudently.
