Gold attracts $500B despite rising yields: Is Bitcoin’s lead at risk?

Is the theory showing what the technicals aren’t?

On the chart, the metals sector looks bearish. On a quarterly basis, gold is up by 8%, and silver is up more than 10%, but compared with Bitcoin’s 30% ROI, this looks like investors have been allocating the safe-haven narrative to BTC.

And in this vein, the risk assets are looking more resilient, heading into the Federal Open Market Committee (FOMC).

However, can this divergence flip soon?

Based on where investors are currently positioned, this thesis doesn’t seem so far-fetched.

Why is gold rising with yields?

Interestingly, an analyst observed that the traditional relationship between gold and Treasury yields has flipped this quarter, suggesting that gold is no longer reacting to rising yields.

Notably, the main driver of the divergence appears to be a strong demand for gold from central banks, which is shifting the precious metal’s yield-sensitive dynamics and providing support to the metal despite high yields. The timing of the divergence is also worth mentioning.

TradingEconomics data showed the 10-year U.S. Treasury Yield had jumped almost 20% since late June. Gold advanced nearly 15% during the same period.

Central bank demand appeared to support gold despite higher yields, weakening the metal’s usual rate sensitivity. This divergence suggested structural demand may now outweigh gold’s sensitivity to monetary expectations.