Tether Gold (XAUT)

What Tether Gold is

Tether Gold (XAUT) is a token that represents ownership of physical gold. Each token "reflects ownership of an undivided specific interest in one fine troy ounce of gold" held in a custodial vault (source: Tether Gold Terms of Sale and Service, September 2026). The gold is held as London Good Delivery bars identifiable by serial number, weight and purity. Verified customers can redeem tokens for physical bars delivered in Switzerland.

It is not a stablecoin pegged to a currency. Its value tracks the gold market, which moves. What the token fixes is the quantity: one XAUT is one fine troy ounce, not one dollar's worth of gold.

How it works

The structure is a custody arrangement wrapped in a token. The issuer buys gold, the custodian vaults it, and tokens are issued against specific bars. The terms define the gold reserves as "specific gold bullion bars meeting the quality assurance requirements of 'London Good Delivery' set by the LBMA and held by the Custodian in a custodial vault, identifiable by a unique serial number, weight and purity."

One design detail is worth understanding. Your ounce is tied to a specific bar, but that tie is not permanent. The terms state the interest "may be reallocated by Tether Gold on behalf of the Gold Token holders, from time to time and without notice, to a fine troy ounce on a different specific bar of gold," and that reallocation may happen every time tokens move between addresses. Reallocation is described as automatic and instantaneous so each token always holds an undivided interest in one fine troy ounce. Holding the token means holding a claim on an ounce, not on a particular numbered bar forever.

Buying and redeeming directly with the issuer requires verification. The terms say plainly that "you must be a verified customer of Tether Gold" to purchase or redeem through the site, with no exceptions, and that the right to do so is personal to you. That means kyc applies at the issuer, even though the token itself transfers freely on-chain to any address.

Redemption comes in bar-sized units. Holders can receive a London Good Delivery bar by redeeming a number of tokens equal to the fine troy ounces the bar contains. The issuer may ask for 430 tokens, adjusted for the bar's actual size and purity to three decimal places, because bars generally contain fewer than 430 fine troy ounces. Delivery is taken in Switzerland at a location of the holder's reasonable choosing, subject to fees. Alternatively, the issuer can arrange a sale through a licensed gold broker, which may carry a brokerage fee or dealer mark-up.

The terms also note that tokens "may be issued by Tether Gold on multiple blockchains in its sole discretion," and warn that tokens on one chain "may not be readily exchangeable" for tokens on another. Check which chain a given XAUT balance lives on before moving it.

Supply and tokenomics

XAUT has no cap, no emission schedule and no staking. Supply expands when verified customers buy gold-backed tokens from the issuer and contracts when they redeem. Every token in circulation is meant to correspond to one fine troy ounce in the reserves, so supply is a direct function of how much gold is vaulted.

There is no yield. Gold does not pay interest, and neither does the token. Costs come from the issuer's fee schedule, which covers purchase, redemption and delivery. Verification of backing is periodic rather than continuous, which is weaker than continuous proof of reserves but stronger than nothing.

History

Tether Gold launched in January 2020, with its first fee schedule taking effect on 23 January 2020. The issuing entity was originally TG Commodities Limited, incorporated in the British Virgin Islands.

The most significant corporate change came in early 2025. The terms record that "Prior to 27 January 2025, these Terms constituted a contract between users of the Site Services and TG Commodities Limited. As of and with effect from 27 January 2025: TG Commodities Limited has redomiciled from the British Virgin Islands to the Republic of El Salvador, and is now named TG Commodities, S.A. de C.V."

With that move came a licence. The terms state the issuer "has obtained authorisation as a Stablecoin Issuer and Digital Assets Service Provider under the El Salvador Regulations for Issuance of Stablecoin Public Offerings and is subject to the regulatory requirements specified by the National Commission of Digital Assets of El Salvador." Purchases and redemptions through the site are deemed to take place in El Salvador.

Risks and what to watch

Custody risk is the headline. The issuer states it "does not insure gold held by the Custodian," and that the custodian's own insurance "is not expected to cover the full amount of Gold Reserves." Loss, theft, damage or restricted access to the vault would be borne by token holders. If the custodian became insolvent, the terms warn a liquidator might freeze access and holders could face expense recovering their allocated bars.

Legal recourse is indirect. The terms say contractual claims "will not be asserted against the Custodian by Tether Gold on behalf of the Gold Token holders," so holders would have to pursue claims themselves.

There is also an allocation-software risk the issuer discloses: if the software that maps bars to addresses fails, the issuer "may be unable to identify the gold bar allocated to a particular deposit address," and a holder unable to redeem "may be designated as an unsecured creditor of the Custodian."

Practically, redemption is not retail-friendly. Bar-sized increments and Swiss delivery mean most holders will never redeem and will instead sell on a market. Market price can trade at a premium or discount to one ounce of gold, and the issuer says it "cannot control how third parties value Gold Tokens." Finally, gold itself is volatile; a fixed quantity of a moving asset is not a stable asset.

Frequently asked questions

How much gold does one XAUT represent?

One fine troy ounce, held in London Good Delivery bars in a custodial vault (source: Tether Gold Terms, September 2026).

Can I take delivery of physical gold?

Yes, if you are a verified customer. Delivery is of a full bar, requiring roughly 430 tokens adjusted for the bar's actual weight and purity, and is taken in Switzerland subject to fees. You can instead ask the issuer to arrange a broker sale.

Who issues Tether Gold?

TG Commodities, S.A. de C.V., registered in El Salvador since redomiciling from the British Virgin Islands on 27 January 2025, and authorised there as a stablecoin issuer and digital assets service provider.

Is the gold audited?

The issuer publishes quarterly gold reserves reports independently reviewed by BDO Italia. These are periodic reviews, not continuous on-chain verification.

Where can I buy Tether Gold?

XAUT trades on a number of centralized venues in addition to being purchasable from the issuer by verified customers. See where to buy Tether Gold and Exchanges.