Gold has climbed to its highest level since April and is closing in on the April record, driven in large part by a steepening U.S. Treasury yield curve that could also help support bitcoin as a non‑yielding store of value.
Over the past ten days gold jumped more than 5% to about $3,480 per ounce, approaching the record high of $3,499 set on April 22. The move coincides with a widening spread between the 10‑year and 2‑year Treasury yields (the 10y‑2y), which has reached roughly 61 basis points—the largest gap since January 2022. The difference between the 30‑year and 2‑year yields is about 1.30%, the widest since November 2021.
That pattern—known as bull steepening—has been driven mainly by a sharp fall in the 2‑year yield (down about 33 bps to 3.62% in August) while the 10‑year has eased less (down roughly 14 bps to 4.23%). In simple terms, when short‑term yields fall faster than long‑term yields, the opportunity cost of holding assets that don’t pay interest, like gold and bitcoin, declines.
Ole Hansen, Head of Commodity Strategy at Saxo Bank, points out that lower front‑end yields make it easier for investors—especially real assets managers—to allocate to gold after a period when elevated U.S. funding costs had constrained purchases. Holdings in bullion‑backed ETFs fell by about 800 tons between 2022 and 2024 as the Federal Reserve raised rates; the recent yield moves may reverse some of that pressure.
Bitcoin shares some characteristics with gold: it is non‑yielding and valued largely for scarcity and demand. A drop in short‑term yields can therefore be considered supportive for BTC. At the same time, bitcoin often behaves like a growth asset tied to the Nasdaq, so its path can diverge from precious metals depending on risk appetite and macro sentiment.
Analysts at ING and others highlight that the relative firmness in longer‑dated yields reflects inflation breakevens (around 2.45%) and higher real yields, signaling investor concern over future inflation and fiscal risks—factors that typically bolster gold’s inflation‑hedge case.
Risk note: Market dynamics around yields, inflation expectations and risk appetite are volatile and can reverse quickly. This analysis is informational and not investment advice; always consider your risk tolerance and consult a professional before acting.
Source: CoinDesk. Read the original coverage for full details.