Gold Prices Drop 8.5% Amid Rising US Treasury Yields

Gold prices fell 8.5% in September, closing the month at US$4,176 per ounce. The World Gold Council attributed this decline to a surge in US Treasury yields, a stronger US dollar, and the liquidation of futures positions.

Despite the price drop, gold exchange-traded funds (ETFs) experienced significant inflows. In the United Kingdom, these inflows reached 54 tonnes. The World Gold Council suggests these flows correlate with rising term premia, indicating that investors are increasingly concerned about inflation and fiscal risks.

Market analysts are now monitoring central bank meetings to determine if bond yields remain elevated. Persistent yields may signal sustained fiscal concerns that could continue to support demand for gold ETFs.