US bond yields and dollar strength drive market volatility

Global financial markets are experiencing volatility driven by rising US bond yields and a strengthening US dollar. Bank of America strategist Michael Hartnett notes that investors are shifting away from risky assets toward cash, a trend supported by inflationary pressures and expectations of monetary tightening.

Simultaneously, gold prices have faced downward pressure, dropping approximately 6% in September. This decline is attributed to rising US Treasury yields, which make non-yielding assets like gold less attractive, and uncertainty regarding the Federal Reserve's interest rate trajectory. However, central bank purchases, particularly from China and Poland, are providing a potential floor for gold prices near the $4,000 level.