The precious metals market saw a particularly volatile session this September 28, marked by a simultaneous collapse in gold and silver. The yellow metal shed nearly 4%, while silver dropped by 5%, resulting in an estimated global loss in value of $1.2 trillion across total stocks. This massive correction is part of a broader depreciation trend, with both assets having fallen by 25% and 50% respectively since their early-year highs.
The primary driver of this slide is the surge in U.S. bond yields. The 10-year Treasury yield crossed the symbolic 5.2% threshold, reaching levels not seen since 2007. With sovereign bonds offering such attractive guaranteed returns, gold and silver—which generate neither dividends nor interest—are mechanically becoming less competitive. Investors are now favoring the secure yield of U.S. Treasuries, driving up the opportunity cost of holding non-yielding assets.
The Federal Reserve's monetary policy is playing a central role in this dynamic, fueling expectations of further interest rate hikes. The prospect of persistent inflation, exacerbated by geopolitical tensions impacting oil prices, is reinforcing the hawkish stance of monetary authorities. At the same time, the U.S. Dollar Index (DXY) remains at high levels, weighing heavily on foreign buyers and increasing selling pressure on commodities.
This sequence reveals a paradoxical vulnerability of traditional safe-haven assets: their high liquidity. In an environment of intense financial tightening, investors are prioritizing cash, turning gold into a source of quick liquidity and accelerating sell-offs. The digital asset market is facing a similar logic, with bitcoin also struggling to establish itself as a credible alternative in the face of this relentless mechanism of real interest rates.
The coming days will be critical for financial markets with the release of the PCE price index and the U.S. employment report. These indicators will be closely scrutinized to anticipate the future trajectory of bond yields. For now, uncertainty remains dominant, leaving non-yielding assets in a phase of high volatility where even the slightest macroeconomic signal could extend the current downward trend.