Gold has suffered one of its most unusual one day declines in two decades as rising U.S. Treasury yields and renewed Federal Reserve rate hike expectations hit non yielding assets, while Bitcoin has faced the same macro pressure near $83,000.
Summary
- Gold fell 3.4% as Treasury yields surged and markets raised expectations for another Federal Reserve rate hike.
- Bitcoin slipped toward $83,000 as rising yields and a stronger dollar put pressure on non yielding assets.
- US spot Bitcoin ETFs drew $2.39 billion last week, providing a source of demand despite worsening macro conditions.
- Bitcoin’s next move could depend on incoming US economic data and whether Treasury yields remain above 5%.
The Kobeissi Letter said gold fell 3.4% on Sept. 28, a move it described as statistically rare based on daily price changes since 2006, when gold’s average daily move was 0.05% with a standard deviation of 1.19%. The decline produced a Z score of negative 2.90, putting the move close to three standard deviations below the average.
Spot gold fell as much as 4% during Monday’s session to $4,110.55 per ounce, its lowest level in more than seven weeks, before recovering some losses to $4,136.81, Reuters reported. U.S. gold futures closed 3.5% lower at $4,168.40.
Bitcoin moved lower during the same period, falling below $83,000 after trading above $87,000 earlier this month. The two assets are now facing pressure from rising bond yields, a stronger U.S. dollar and expectations that the Fed could raise interest rates again.
Rising yields have pushed gold lower
Gold’s selloff followed another rise in U.S. Treasury yields as oil prices and inflation concerns kept expectations for tighter monetary policy alive.
The 10 year Treasury yield reached 5.23% on Sept. 28, its highest level since 2007, while the 30 year yield touched 5.54%, according to market data. The two year yield, which is more sensitive to expectations for Fed policy, climbed to around 4.92%.
Higher bond yields raise the return available on government debt while gold pays no interest. A stronger dollar can create another obstacle because dollar denominated gold becomes more expensive for buyers using other currencies.
Oil prices added to the pressure after U.S. President Donald Trump rejected Iran’s proposal for a seven day ceasefire and reopening of the Strait of Hormuz. Brent crude moved back above $100 per barrel as traders weighed the risk that high energy prices could keep inflation elevated.
Expectations for another Fed rate hike rose alongside yields. Markets were pricing a high probability of another increase by December after the central bank raised its target range by 25 basis points to 3.75% to 4% on Sept. 16.
Gold was not alone in reacting to the repricing. Silver lost around 4.5% on Monday, while platinum and palladium fell 2.8% and 3.6%, respectively.
Bitcoin price faces the same Treasury yield pressure
Bitcoin traded near $83,000 on Sept. 29 after falling for several sessions, leaving BTC roughly 5% below its Sept. 21 high near $87,400.
Rising yields have already emerged as a recurring source of pressure for the cryptocurrency. As crypto.news previously reported, the 10 year Treasury yield reached 5.2% on Sept. 24 while Bitcoin retreated from above $87,000 toward $84,000.
A similar pattern appeared earlier this month when Bitcoin slipped below $77,500 as rising oil prices, higher bond yields and renewed expectations for a U.S. rate hike outweighed spot ETF inflows.
The pressure comes from competition for capital. Treasury securities offer investors a yield backed by the U.S. government, while Bitcoin and gold generate no cash flow simply from being held. Higher real yields can therefore change how investors allocate money across bonds and non yielding assets.
Bitcoin’s response to falling yields earlier this year provides another reference point. BTC climbed above $63,000 in July when easing oil prices and lower Treasury yields improved risk appetite.
The relationship moved in the opposite direction in September. Bitcoin fell toward $77,000 earlier this month as persistent inflation and rising Treasury yields weighed on crypto markets, with technical levels at the time pointing to potential support between $72,000 and $74,000 if selling continued.
What does the gold crash mean for Bitcoin price?
Gold’s decline does not by itself require Bitcoin to follow it lower, but both assets are being exposed to the same interest rate environment.
Monday provided an example. Gold fell more than 3% while Bitcoin dropped toward $82,600 before recovering toward $83,000. U.S. stocks moved lower as well, with the S&P 500 losing 0.8%, the Nasdaq Composite falling 0.9% and the Dow Jones Industrial Average declining 0.7%.
Bitcoin has been especially sensitive to Treasury yields during recent months. The August Treasury buyback plan provided an earlier example of the opposite setup, when falling long term yields coincided with a major Bitcoin rally.
The U.S. Treasury said on Aug. 19 that it would raise the maximum size of liquidity support buybacks for 10 to 20 year and 20 to 30 year nominal securities from $2 billion to at least $4 billion per operation. The 30 year yield fell from a 19 year high of 5.34% to 5.19% around that period, while Bitcoin rallied.
Monday’s market conditions reversed part of that backdrop. The 10 year yield moved above 5.2%, the dollar strengthened and oil prices rose as traders reassessed inflation and the path of U.S. interest rates.
Incoming economic data could change those expectations again. Markets are awaiting U.S. job openings, personal consumption expenditures inflation and employment data, which could influence expectations for the Fed’s next policy decision.
Bitcoin ETF inflows offer a counterweight
Bitcoin enters the latest macro selloff with a source of demand that has remained active despite high yields.
U.S. spot Bitcoin ETFs recorded $2.39 billion in net inflows during the Sept. 21 to Sept. 25 trading week, with positive flows recorded during all five sessions.
Monday, Sept. 21, produced the largest intake at $999 million, followed by $714.7 million on Sept. 22. BlackRock’s IBIT accounted for roughly $1.16 billion of the week’s total.
The inflows continued while Bitcoin struggled to remain above $87,000. BTC reached an eight month high during the rally before retreating toward $85,000, while futures traders added more than $2 billion in positions as leverage returned to the market.
ETF demand has persisted over a longer period. U.S. spot Bitcoin funds have collected roughly $5.3 billion since August, when the Treasury first announced larger long dated bond buybacks. The latest flows pushed 2026 ETF demand back into positive territory after net flows had fallen roughly $5.8 billion below zero in July.
Bitcoin remained near $83,000 on Sept. 29 as traders waited for the next set of U.S. economic data, while the 10 year Treasury yield remained above 5% following Monday’s bond market selloff.
