Gold Price Surge and Tokenized Gold: Why PAXG Trading Matters in 2026

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Gold prices surged past $5,400 per ounce in late February 2026 as US-Israeli military strikes on Iran triggered a global flight to safety. The move marked one of the sharpest safe-haven rallies in recent years — but it also exposed a structural limitation of traditional gold markets.

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Physical gold and gold ETFs don't trade on weekends. Tokenized gold does.

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When the strikes hit on February 28, traditional spot gold markets were closed. But on crypto exchanges, PAXG — a tokenized gold asset backed 1:1 by physical gold in London vaults — rallied in real time. For the first time at this scale, the 24/7 nature of crypto rails proved directly relevant to safe-haven asset access.

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What Is PAXG?

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Pax Gold (PAXG) is an ERC-20 token issued by Paxos Trust Company. Each token represents one fine troy ounce of London Good Delivery gold stored in LBMA-certified vaults. Paxos operates under the regulatory oversight of the New York State Department of Financial Services (NYDFS) and the Office of the Comptroller of the Currency (OCC).

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PAXG is not a synthetic product or a derivative. Each token is backed by allocated, serialized gold. Holders can verify the specific gold bar backing their tokens using Paxos’s lookup tool. Monthly third-party attestations confirm that supply matches physical reserves.

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As of early 2026, PAXG’s market capitalization exceeded $2.2 billion. For a deeper dive, see our full PAXG guide or compare options in our top gold-backed tokens article.

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How Markets Responded to the Iran Crisis

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Oil jumped 6-9% as traders priced in potential disruption to the Strait of Hormuz, through which roughly 20% of global oil flows. Brent crude spiked to $77-82 per barrel.

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Gold surged from around $5,300 to above $5,400 per ounce. But traditional spot gold markets were closed for the weekend. The rally was visible in tokenized gold markets and futures, which traded 24/7.

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Bitcoin dropped approximately 3.8% to below $64,000 in the initial selloff, then recovered to above $68,000 within hours. The pattern confirmed BTC currently behaves more like a risk asset than a safe haven during geopolitical shocks.

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Equities were closed for the weekend. When they reopened, S&P 500 futures dropped more than 1%.

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The key takeaway: gold performed exactly as expected as a safe-haven asset. But people who relied on traditional market hours had to wait until Monday to act. Those who held PAXG on crypto exchanges had continuous access throughout the crisis.

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Trading PAXG on Backpack

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Spot trading (PAXG/USD). Buy and hold PAXG directly. Backpack offers zero fiat fees for PAXG purchases. Once purchased, PAXG can be held in your Backpack account or withdrawn to an external Ethereum wallet.

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Perpetual futures (PAXG-PERP). Take leveraged long or short positions on gold prices through perpetual futures contracts. This allows traders to express directional views on gold with capital efficiency.

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Both products are available 24/7. With Auto Lend enabled, your deposited PAXG or other assets generate yield automatically while remaining fully available as collateral for futures trading. This is the Interest Bearing Perpetuals system — you don’t sacrifice yield to trade.

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For advanced strategies, the basis trading guide explains how to combine spot and futures positions to capture funding rates while maintaining market-neutral exposure.

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Gold vs. Bitcoin: What 2026 Has Shown

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Year-to-date in 2026, gold and Bitcoin have diverged sharply. Gold is up significantly, driven by persistent inflation concerns, central bank buying, and geopolitical risk. Bitcoin has pulled back from its late 2025 highs and remains range-bound between $60,000 and $72,000.

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During previous geopolitical events — including the Russia-Ukraine war in 2022 and the Israel-Palestine conflict in 2023 — Bitcoin also sold off rather than rallying alongside gold.

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For investors who want actual safe-haven exposure through crypto rails, tokenized gold products like PAXG deliver what the “digital gold” narrative promises but hasn’t yet delivered for Bitcoin in crisis moments.

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How to Start Trading Gold on Backpack

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1. Create a Backpack account and complete KYC verification.

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2. Deposit USD or USDC.

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3. Navigate to the PAXG/USD spot market to buy tokenized gold, or PAXG-PERP for leveraged exposure.

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4. Enable Auto Lend to earn yield on your deposited assets while they serve as collateral.

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Backpack is also rolling out on-chain IPO access for tokenized equities through its partnership with Superstate. Join the IPO waitlist for early access.

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Disclaimer: This content is presented to you on an “as is” basis for general information and educational purposes only, without representation or warranty of any kind. It should not be construed as financial, legal or other professional advice, nor is it intended to recommend the purchase of any specific product or service. You should seek your own advice from appropriate professional advisors. Where the article is contributed by a third party contributor, please note that those views expressed belong to the third party contributor, and do not necessarily reflect those of Backpack. Please read our full disclaimer for further details. Digital asset prices can be volatile. The value of your investment may go down or up and you may not get back the amount invested. You are solely responsible for your investment decisions and Backpack is not liable for any losses you may incur. This material should not be construed as financial, legal or other professional advice.

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