Gold (Leak) has progressed to its highest level since April, with prospects for further gains as frequently noticed factors of the curve curve that gain momentum. This change in the bond market may also provide help with Bitcoin .
Over the past ten days, the price of gold has increased by more than 5% to $ 3,480 per ounce, approaching the record of $ 3,499 set on April 22, according to TradingView data.
The rally coincides with a steep US yield curve, as the spread between 10-years and 2-year yield (10y2y) Expanded to 61 points basis-the highest since January 2022. Meanwhile, the gap between 30-years and 2-year yield has reached 1.30%, the widest since November 2021.
This steepening is driven by more than a faster collapse in the 2-year yield, which fell 33 basis points to 3.62% in August, compared to a smaller 14-base-point decline in the 10-year yield, now at 4.23%. In terms of the bond market, it is known as a “bull steepening,” which is shorter bond prices more intense (produces autumn) than those longer. ((Bond prices move in the opposite direction of the produce.)
Ole Hansen, head of a commodity approach to the Saxo Bank, explained that this dynamic is positive for gold.
“For gold, the lower front-end results in the ease of costs of handling non-reaping properties. This change is particularly associated for real ownership managers, many of them struggling-or in some cases are prevented-from the allocation of gold, while US funding costs are raised,” Hansen said in a review of the Hukan’s review.
Hansen explained that the total handling of the ETFs supported by the bullion were rejected by 800 tons between 2022 and 2024, while the Fed raised rates to combat inflation, which sent short durations of higher duration of higher.
Bitcoin is often compared to gold as a store of value, and like gold, it is considered a non-harvest. Neither bitcoin nor gold generate interest or dividends; Their value is primarily driven by lack, demand, and market understanding. Thus, the rejection of the two-year yield may be considered a bullish development for BTC.
Meanwhile, the resilient relative of a longer yield period is linked to the expectations of adhesive inflation and other factors, which also supports the bullish case in gold and BTC.
“The US Treasury curve is not surprisingly steep: lower rates are now the risk of inflation of inflation earlier, which is bad news for bonds,” the analysts told ING in a note to clients on Friday.
Hansen explained that most of the 10-year-old relatives come from inflation breakevens, which are currently around 2.45%, and the rest represents the real yield.
“(This) suggests that investors demand greater compensation for financial risks and potential political interference in financial policy. This environment usually supports gold as both an inflation hedge and a caution against policy credentials concerns,” Hansen said.
The nominal yield consists of two ingredients: first, the inflation breakeven, which reflects the market hopes for average inflation at the bond age. This part of the harvest pays for the loss of purchase power due to inflation. The second ingredient is the true harvest, which represents the additional compensation that the above consumers demand above and beyond inflation.
Bull steepening is bearish for stocks
History, gold and gold miners are among the best performers during the long period of bull steepening in the yield curve, according to analysis of Views by the counselor. Conversely, stocks tend to be underperform in these environments.
Generally, bitcoin found itself in an intriguing position, giving its dual nature as an emerging technology that often moves to Nasdaq, while also sharing features like gold as a store of value.
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