Gold is rallying on a strong catalyst, with potential positive spillover for Bitcoin.

Gold Rally Gains Momentum as Treasury Curve Steepens, Eyeing Bitcoin Gains

Gold (XAU) has surged to its highest level since April, closing in on the $3,499 record, as a steepening U.S. Treasury yield curve attracts renewed attention to non-yielding assets. Analysts say the trend could also benefit bitcoin (BTC).

Over the past ten days, gold has climbed more than 5% to $3,480 per ounce. The rally coincides with a “bull steepening” in the Treasury curve, where short-term yields fall faster than long-term yields. 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 reached 1.30%, the widest since November 2021.

The 2-year yield dropped 33 basis points to 3.62% in August, while the 10-year fell only 14 points to 4.23%. Lower short-term yields reduce the opportunity cost of holding gold, making it attractive for investors who previously avoided non-yielding assets amid higher funding costs.

Ole Hansen, Head of Commodity Strategy at Saxo Bank, said declining front-end yields are positive for gold, especially for institutional managers constrained by elevated borrowing costs. Between 2022 and 2024, gold-backed ETFs shed 800 tons, but current conditions favor renewed accumulation.

Bitcoin, often called digital gold, could see similar benefits. Like gold, BTC generates no yield, so falling short-term rates enhance its appeal. Combined with relatively stable long-term yields, driven by inflation expectations and fiscal risk, the environment supports both gold and bitcoin as hedges.

Historically, bull steepening periods favor gold and miners while equities underperform. Bitcoin’s dual nature—moving with tech stocks yet sharing gold-like properties—positions it as a potential store of value amid rising market uncertainty.