Gold Surges as Treasury Curve Steepens, Eyeing Bitcoin Boost
Gold (XAU) has climbed to its highest level since April, approaching the $3,499 record, as a steepening U.S. Treasury yield curve drives renewed interest in non-yielding assets. Analysts suggest that this trend could also support bitcoin (BTC).
Over the past ten days, gold has gained over 5%, reaching $3,480 per ounce. The rally aligns with a steepening Treasury curve: the 10-year minus 2-year spread widened to 61 basis points—the highest since January 2022—while the 30-year minus 2-year gap hit 1.30%, the widest since November 2021.
This “bull steepening” occurs as short-term yields fall faster than long-term yields. The 2-year yield dropped 33 basis points to 3.62% in August, while the 10-year fell just 14 points to 4.23%. Lower front-end yields reduce the opportunity cost of holding gold, making it more attractive for investors.
Ole Hansen, Head of Commodity Strategy at Saxo Bank, explained that declining short-term yields favor gold, especially for institutional managers previously constrained by high funding costs. Between 2022 and 2024, gold-backed ETFs saw outflows of 800 tons, but the current environment is more supportive.
Bitcoin, often likened to digital gold, may also benefit. Like gold, BTC produces no yield, and its appeal rises when short-term yields decline. The relative stability of longer-term yields, driven by inflation expectations and real yield demands, further reinforces gold and bitcoin as hedges against market and policy risks.
Historically, bull steepening periods favor gold and miners, while equities lag. Bitcoin occupies a unique space: it can move with tech stocks but also shares gold-like qualities, potentially positioning it as a resilient store of value in the current macro environment.
