A key driver behind gold’s rally may also lift Bitcoin in the coming weeks.

Gold Rally Strengthens as Treasury Yield Curve Steepens, Could Boost Bitcoin

Gold (XAU) has climbed to its highest level since April, nearing the record $3,499, as shifts in the U.S. Treasury yield curve provide a bullish backdrop for non-yielding assets. Analysts say this trend could also benefit bitcoin (BTC).

Over the past ten days, gold has surged over 5% to $3,480 per ounce, approaching April’s peak. The rally coincides with a steepening Treasury yield curve: the 10-year minus 2-year spread (10y2y) has 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 steepening stems from a faster drop in the 2-year yield, which fell 33 basis points to 3.62% in August, compared with a smaller 14-basis-point decline in the 10-year yield, now at 4.23%. In market terms, this “bull steepening” occurs when short-term yields fall faster than long-term yields, benefiting non-yielding assets like gold.

Ole Hansen, Head of Commodity Strategy at Saxo Bank, noted that lower short-term yields reduce the opportunity cost of holding gold. “This shift is particularly relevant for real asset managers, many of whom were previously constrained from allocating to gold due to elevated funding costs,” Hansen said.

Gold-backed ETFs have seen outflows of 800 tons between 2022 and 2024 as the Fed hiked rates, but the current environment favors renewed accumulation.

Bitcoin, often called “digital gold,” may also benefit. Like gold, BTC generates no yield, and its appeal rises when short-term yields decline. Combined with macro uncertainty, this dynamic can make both assets attractive for investors seeking a store of value.

Longer-term yields remain supported by inflation expectations and real yield demand, reinforcing gold’s bullish case. Analysts at ING said, “Lower front-end rates today risk fueling inflation later, which is negative for bonds but positive for non-yielding stores of value.”

Historically, periods of yield curve bull steepening have favored gold and gold miners, while equities underperform. Bitcoin sits in a unique position: it can track tech equities but also shares gold-like traits, making it potentially resilient amid rising short-term bond demand.