Gold Nears Record High as Yield Curve Steepening Boosts Safe-Haven Assets

Gold prices are pushing toward record highs, lifted by a powerful shift in U.S. bond markets that could also brighten the outlook for Bitcoin.

Over the past ten days, gold has rallied more than 5% to $3,480 per ounce, approaching the all-time peak of $3,499 set in April. The catalyst lies in the Treasury market, where the yield curve is steepening at its fastest pace in years. The spread between the 10-year and 2-year yields has widened to 61 basis points, the highest since early 2022, while the 30-year versus 2-year spread hit 1.3%, a level last seen in late 2021.

This “bull steepening” is being driven by a sharper decline in short-term yields. The two-year yield fell 33 basis points in August to 3.62%, while the 10-year yield slipped just 14 basis points to 4.23%. In market terms, short-dated bonds are rallying faster, lowering the front-end yields that set funding costs across the economy.

Why This Matters for Gold and Bitcoin

Ole Hansen, head of commodity strategy at Saxo Bank, noted that lower short-term yields reduce the opportunity cost of holding non-yielding assets like gold. “This shift is particularly relevant for real asset managers, many of whom were restricted from allocating to gold while U.S. funding costs were elevated,” Hansen wrote.

Bitcoin, often framed as “digital gold,” stands to benefit from the same dynamic. Neither asset generates yield, so falling front-end rates make their scarcity-driven value proposition more attractive.

Longer-dated yields, meanwhile, have been slower to fall, reflecting lingering inflation fears and concerns about fiscal credibility. Inflation breakevens remain anchored near 2.45%, with the rest of the 10-year yield made up of “real yield” demanded by investors wary of political interference with monetary policy. This backdrop further supports demand for hard assets as hedges against inflation and credibility risks.

Historical Context

Periods of bull steepening have historically been favorable for gold and gold miners, while often bearish for equities. For Bitcoin, the story is more complex: the asset trades both as a growth-sensitive technology play, moving in step with the Nasdaq, and as a store of value with gold-like characteristics.

That dual identity could now place BTC at a crossroads, with falling front-end yields offering macro support even as broader risk sentiment remains fragile.