PAXG May Trade at Record Premium to Spot Gold Amid Binance-Led Volume Surge and Possible Liquidations

• PAXG hit an all-time high and traded at a premium to spot gold on October 17, 2025.

• PAXG recorded intraday volumes above $854M and saw concentrated liquidity on major exchanges, including Binance.

• Gold-backed tokens collectively locked roughly $3.39B, highlighting growing demand for tokenized bullion.

PAXG surged to record highs vs spot gold with heavy volumes and exchange premiums. Read COINOTAG’s concise analysis of flows, risks and market implications. View on-chain data.

Published: October 17, 2025 · Updated: October 17, 2025 · Author: COINOTAG

What is Pax Gold (PAXG) and why did it spike?

PAXG is a tokenized gold asset representing physical bullion held in vaults; it surged to an all-time high on October 17, 2025 as market participants rotated into gold-based tokens amid crypto volatility. The rally was driven by concentrated inflows, exchange liquidity dynamics and on-chain movement of funds.

Why did PAXG trade at a premium to spot gold?

PAXG traded above spot gold primarily because tokenized instruments trade freely on crypto markets with differing liquidity and demand profiles. On October 17, 2025, PAXG reached $4,407.52 versus spot gold at $4,364.82, with intraday spikes on some exchanges—Binance accounted for ~20% of PAXG volumes, and exchange orderbooks produced short squeezes and liquidation-driven spikes.

PAXG’s premium reflected rapid inflows as traders sought to park gains while broader crypto assets, including major altcoins and Bitcoin, weakened. On-chain analysis showed concentrated transfer volumes into gold-backed tokens and stablecoins around major bearish narratives, followed by renewed entries on bullish news. The rally featured record daily volumes reported above $854 million for PAXG, and the broader cohort of gold-backed tokens held roughly $3.39 billion in total locked value.

$197B in 24hr volume into Pax or Tether Gold, or flowed into/through stablecoins. Seen anytime big bearish news narratives, also see it re-enter on bullish news narratives that follow.

Your money is not trash, dont treat it as such by entering garbage assets-know what u hold! — JoeBPackN (Twitter) — October 17, 2025

PAXG was among the first gold-based tokens to rally out of a previously niche market. Tokenization enabled unrestricted trading, allowing rapid bidding and inflows that outpaced physical-market settlement processes. That price discovery differential is a core reason PAXG and similar tokens can trade at premiums or experience sharp corrections.

PAXG briefly surpassed spot gold’s recent record, peaking at $4,407.52 while spot gold registered $4,364.82 in the same window. On some exchange venues, PAXG spiked higher—Binance quotes showed a temporary $4,790 print during a period of concentrated bids and derivative liquidations, illustrating how exchange-specific dynamics can amplify moves.

How do other gold-backed tokens compare?

Other gold tokens led market performance that day. Tether’s XAUT remained the largest by market capitalization and generally traded at a smaller premium—around $4,373.04 during the cited session—while XAUT’s historical peak reached $5,106, a level driven largely by derivative market dynamics and short-covering. Market participants cite custody claims and issuer transparency when assessing relative reliability.

The gold-backed token segment totals roughly $3.39 billion in locked assets, a modest slice of the tokenization and crypto universe but large enough to influence trading flows during risk-off or rotation events. Not all issuers offer identical backing guarantees; participants should review custody statements and issuer disclosures. Sources: on-chain analysis, exchange orderbooks, issuer statements (plain text).

PAXG traded at a premium on Binance, as the price spiked above $5,000 at one point, on a targeted trade to liquidate short positions. | Source: Binance.

Exchange concentration mattered: Binance represented roughly 20% of observed PAXG volumes during the surge, with a slight premium on that venue compared to aggregated price indices. That concentration increases the potential for venue-specific distortions—both upward spikes and swift corrections—especially when leveraged positions are present. Historically, PAXG premiums have been erased in flash crashes tied to liquidity gaps and liquidation cascades.

PAXG also drew attention in market commentary after reports that Paxos mistakenly minted 300T PYUSD; the incident increased scrutiny on issuer operations and market plumbing. Institutional participants and retail traders alike weighed custody assurances and issuer risk amid the token’s rapid price action. Sources: Paxos (issuer statements), exchange trade records, on-chain metrics (plain text).

Frequently Asked Questions

How large were PAXG trading volumes during the October 17, 2025 rally?

PAXG recorded single-day volumes above $854 million during the rally, with significant inflows concentrated on major exchanges. The broader pool of gold-backed tokens collectively held about $3.39 billion in locked value at the time, per on-chain aggregation and exchange-reported volumes.

Did PAXG’s price move reflect changes in physical gold markets?

Not directly. While spot gold also climbed, PAXG’s premium was largely a function of crypto market dynamics—exchange liquidity, concentrated on-chain flows and derivative liquidations—so its short-term moves can diverge from physical gold price action.

Key Takeaways

• PAXG outperformed spot gold intraday: Rapid inflows and exchange demand pushed PAXG above spot prices on October 17, 2025.
• Volume and venue concentration matter: High volumes (> $854M) and ~20% share on Binance amplified premiums and liquidation events.
• Assess custody and issuer risk: Tokenized gold’s appeal hinges on issuer transparency; review custody statements and on-chain reserve indicators before allocating.

Conclusion

PAXG’s October 17, 2025 surge underlines how tokenized gold can attract rapid capital in volatile markets, producing premiums versus spot bullion driven by exchange liquidity and on-chain flows. Market participants should weigh the benefits of tokenized access to gold against issuer, custody and liquidity risks. For traders and allocators, monitor on-chain metrics, exchange orderbooks and issuer disclosures before positioning.