Gold-backed cryptocurrencies such as Paxos Gold (PAXG) and Tether Gold (XAUT) have retreated from their all-time highs as the global financial markets experienced a downturn, largely due to new tariffs introduced by President Trump.

Initially, these cryptos surged as investors sought refuge amidst the uncertainty brought on by the tariffs. However, with substantial losses in equity markets, many are choosing to liquidate safer assets, including gold-backed tokens, to manage their cash flow and cover losses.

Key points to note:

• Gold has declined after reaching a record peak as markets responded to the new tariffs from Trump.
• A widespread sell-off in equities forced many investors to sell gold to raise funds.
• Central banks increased their gold purchases in February, led by Poland and China.

Despite the recent drop, gold-backed cryptocurrencies remain up by 17% this year, driven by Federal Reserve interest rate cuts and significant demand from Asia, alongside central bank purchases.