Gold’s Rally Has a Big Catalyst, and It Could Help Bitcoin Too

Gold (XAU) has surged to its highest level since April, with prospects for further gains as the often-overlooked factor of Treasury yield curve steepening gains momentum. This shift in the bond market could also provide a boost to bitcoin (BTC). Over the past ten days, the price of gold has increased by more than 5% to $3,480 per ounce, inching closer to the record high of $3,499 set on April 22, according to TradingView data. The rally coincides with a steepening U.S. Treasury yield curve, as the spread between 10-year and 2-year yields (10y2y) widened to 61 basis points – the highest since January 2022. Meanwhile, the gap between 30-year and 2-year yields reached 1.30%, the widest since November 2021. This steepening has been driven largely by a faster decline in the 2-year yield, which fell 33 basis points to 3.62% in August, compared to a smaller 14-basis-point decline in the 10-year yield, now at 4.23%. In bond market terms, this is known as a “bull steepening,” where shorter-term bond prices rise more sharply (yields fall) than longer-term ones. ((Bond…