Market Data 
PAXG spiked as high as $2,923 on Saturday, trading at premium of over 20% to gold’s per ounce price of $2,342.90 on Friday.
Bitcoin traded at a perfect negative correlation to PAXG in a sign of weak demand as a geopolitical hedge.
Prices for PAX Gold (PAXG), a gold-backed digital asset created by Paxos, surged over the weekend as escalating geopolitical tensions in the Middle East catalyzed demand for haven assets.
PAXG rose as high as $2,923 on Saturday, trading at a premium of over 20% to the yellow metal’s per-ounce price of $2,342.90 at Friday’s New York close, CoinDesk data show. As of writing, PAXG still drew a notable premium, trading at $2,471.
Meanwhile, bitcoin and other major cryptocurrencies traded under pressure as Iran fired explosives at Israel in retaliation for a suspected Israeli attack on its consulate in Syria on April 1. On Sunday, Iran warned Israel and the United States of a much larger response after Tel Aviv said it would respond to Iran’s retaliatory aggression.
With a market capitalization of over $446 million, PAXG is the world’s second-largest tokenized gold coin. Leading the pack is tether gold (XAUT) with a market capitalization of $581.9 million. PAG’s weekend surge did not spill over into XAU and other gold tokens. CoinDesk reached out to Paxos for comment and awaited a response at press time.
Gold has surged over 8% in four weeks, while bitcoin has declined by 10%. On Friday, analysts at Goldman Sachs raised its year-end price forecast for gold to $2,700 from $2,300, saying that momentum and retail investors haven’t yet piled into the yellow metal.
Leading indicator
Several traditional market participants closely followed PAG’s spike and BTC’s slide over the weekend, wondering if the classic risk-off action in the 24/7 crypto market was a sign of things to come in stocks on Monday.
“And so now everyone who isn’t involved in crypto is watching BTC to gauge the market impact of war cuz it’s the only thing that’s open when drones fly,” Andy Constan, founder of macroeconomic research firm Damped Spring, said on X.
Former Bridgewater Executive and CIO of Unlimited Funds Bob Elliot said BTC’s perfect negative correlation with PAXG over the weekend dented the leading digital asset’s appeal as a geopolitical hedge.
“Bitcoin may be many things, but it is not a geopolitical hedge. This weekend was another good empirical test. BTC traded with a near-perfect negative correlation over the last day to PAXG, a gold-backed token. If anything it’s becoming an even worse hedge over time,” Elliot said on X.
