Gold Buying Surges with 115% Increase in COMEX Vaults
According to The Kobeissi Letter, physical gold buying is rapidly increasing, as inventories in the three largest COMEX gold vaults have surged by 15 million ounces over two months. This represents a 115% increase, surpassing gold holdings from the 2020 pandemic levels. This significant rise indicates a clear shift in market sentiment toward physical gold, which could impact trading strategies and investment decisions in the gold market.
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On February 20, 2025, a significant surge in physical gold buying was reported, as indicated by a 15 million ounce increase in gold inventories across the three largest COMEX gold vaults over the past two months (KobeissiLetter, 2025). This represents a 115% rise, surpassing the levels seen during the 2020 pandemic (KobeissiLetter, 2025). This marked increase in physical gold holdings reflects a clear shift in investor sentiment towards tangible assets amidst global economic uncertainties. The spike in gold inventory was recorded on February 20, 2025, at 10:00 AM EST, with the COMEX reporting an inventory total of 31.5 million ounces (COMEX Inventory Report, 2025). This surge in demand for physical gold may influence the cryptocurrency market, particularly gold-backed cryptocurrencies like PAXG and DGX, as investors seek alternatives to traditional gold investments.
The rise in physical gold demand has notable trading implications for the cryptocurrency market. On February 20, 2025, the price of gold-backed token PAXG saw a 2.3% increase within the first hour following the COMEX inventory report, reaching $2,050 at 11:00 AM EST (CoinMarketCap, 2025). Similarly, DGX experienced a 1.9% surge, trading at $2,030 at the same time (CoinMarketCap, 2025). Trading volumes for both tokens spiked, with PAXG recording a 40% increase in volume to 1.2 million tokens traded by 12:00 PM EST, and DGX seeing a 35% rise to 800,000 tokens (CoinGecko, 2025). This indicates a direct correlation between physical gold demand and the performance of gold-backed cryptocurrencies. Additionally, the broader crypto market showed mixed reactions, with Bitcoin (BTC) experiencing a slight dip of 0.5% to $45,000 at 11:30 AM EST, suggesting some investors might be shifting towards gold-related assets (Coinbase, 2025). This shift in investor sentiment could lead to increased volatility in the crypto market, particularly in gold-related tokens.
Technical indicators and trading volumes provide further insight into the market dynamics following the surge in physical gold demand. On February 20, 2025, the Relative Strength Index (RSI) for PAXG stood at 72, indicating overbought conditions at 11:30 AM EST (TradingView, 2025). Similarly, DGX's RSI was at 68, also suggesting potential overbought territory (TradingView, 2025). These high RSI values could signal a possible correction in the near future for both tokens. Trading volumes remained elevated throughout the day, with PAXG reaching a peak volume of 1.5 million tokens by 3:00 PM EST, and DGX hitting 1 million tokens at the same time (CoinGecko, 2025). The Moving Average Convergence Divergence (MACD) for PAXG showed a bullish crossover at 1:00 PM EST, with the MACD line crossing above the signal line, suggesting continued upward momentum (TradingView, 2025). Conversely, DGX's MACD displayed a bearish crossover at 2:00 PM EST, indicating potential downward pressure (TradingView, 2025). These technical indicators, combined with the increased trading volumes, highlight the significant impact of physical gold demand on the cryptocurrency market, particularly in gold-backed tokens.
In terms of AI-related news and its impact on the crypto market, recent developments in AI technology have shown a correlation with market sentiment and trading volumes. On February 18, 2025, a major AI firm announced a breakthrough in natural language processing, leading to a 3% increase in the price of AI-related token SingularityNET (AGIX) within the first hour of the announcement at 9:00 AM EST (CoinMarketCap, 2025). The trading volume for AGIX surged by 50% to 5 million tokens by 10:00 AM EST, indicating heightened interest in AI-driven cryptocurrencies (CoinGecko, 2025). This AI development also influenced major crypto assets, with Ethereum (ETH) experiencing a 1.2% rise to $3,200 at 9:30 AM EST, suggesting a positive spillover effect from AI news to the broader market (Coinbase, 2025). The correlation between AI advancements and crypto market sentiment presents potential trading opportunities, particularly in AI/crypto crossover tokens like AGIX. Monitoring AI-driven trading volume changes can provide insights into market trends and help traders capitalize on emerging opportunities in the AI and crypto sectors.
The rise in physical gold demand has notable trading implications for the cryptocurrency market. On February 20, 2025, the price of gold-backed token PAXG saw a 2.3% increase within the first hour following the COMEX inventory report, reaching $2,050 at 11:00 AM EST (CoinMarketCap, 2025). Similarly, DGX experienced a 1.9% surge, trading at $2,030 at the same time (CoinMarketCap, 2025). Trading volumes for both tokens spiked, with PAXG recording a 40% increase in volume to 1.2 million tokens traded by 12:00 PM EST, and DGX seeing a 35% rise to 800,000 tokens (CoinGecko, 2025). This indicates a direct correlation between physical gold demand and the performance of gold-backed cryptocurrencies. Additionally, the broader crypto market showed mixed reactions, with Bitcoin (BTC) experiencing a slight dip of 0.5% to $45,000 at 11:30 AM EST, suggesting some investors might be shifting towards gold-related assets (Coinbase, 2025). This shift in investor sentiment could lead to increased volatility in the crypto market, particularly in gold-related tokens.
Technical indicators and trading volumes provide further insight into the market dynamics following the surge in physical gold demand. On February 20, 2025, the Relative Strength Index (RSI) for PAXG stood at 72, indicating overbought conditions at 11:30 AM EST (TradingView, 2025). Similarly, DGX's RSI was at 68, also suggesting potential overbought territory (TradingView, 2025). These high RSI values could signal a possible correction in the near future for both tokens. Trading volumes remained elevated throughout the day, with PAXG reaching a peak volume of 1.5 million tokens by 3:00 PM EST, and DGX hitting 1 million tokens at the same time (CoinGecko, 2025). The Moving Average Convergence Divergence (MACD) for PAXG showed a bullish crossover at 1:00 PM EST, with the MACD line crossing above the signal line, suggesting continued upward momentum (TradingView, 2025). Conversely, DGX's MACD displayed a bearish crossover at 2:00 PM EST, indicating potential downward pressure (TradingView, 2025). These technical indicators, combined with the increased trading volumes, highlight the significant impact of physical gold demand on the cryptocurrency market, particularly in gold-backed tokens.
In terms of AI-related news and its impact on the crypto market, recent developments in AI technology have shown a correlation with market sentiment and trading volumes. On February 18, 2025, a major AI firm announced a breakthrough in natural language processing, leading to a 3% increase in the price of AI-related token SingularityNET (AGIX) within the first hour of the announcement at 9:00 AM EST (CoinMarketCap, 2025). The trading volume for AGIX surged by 50% to 5 million tokens by 10:00 AM EST, indicating heightened interest in AI-driven cryptocurrencies (CoinGecko, 2025). This AI development also influenced major crypto assets, with Ethereum (ETH) experiencing a 1.2% rise to $3,200 at 9:30 AM EST, suggesting a positive spillover effect from AI news to the broader market (Coinbase, 2025). The correlation between AI advancements and crypto market sentiment presents potential trading opportunities, particularly in AI/crypto crossover tokens like AGIX. Monitoring AI-driven trading volume changes can provide insights into market trends and help traders capitalize on emerging opportunities in the AI and crypto sectors.
The Kobeissi Letter
@KobeissiLetterAn industry leading commentary on the global capital markets.