Date: 3rd September 2025.
Global Market Turmoil: Bond Yields Surge, Gold Hits Record High.
Global financial markets came under pressure on Tuesday as rising bond yields, inflation concerns, and political uncertainty shook investor confidence. The result was a sharp selloff in equities, soaring government borrowing costs, and a flight to safe-haven assets such as gold and silver.
Bond Yields Surge to Multi-Decade Highs
US markets reopened after the Labor Day holiday to heavy selling, as an avalanche of new corporate bond issuance amplified pressure on Treasuries. Longer-dated maturities bore the brunt, with the UK’s 30-year gilt yield climbing 6 basis points to 5.692% — its highest level since 1998. The surge in yields reflected deep investor unease, leaving equity markets awash in red.
The trend extended globally:
* Japan’s 30-year government bond (JGB) yield climbed to a record 3.255%.
* The US 30-year Treasury yield approached the key 5% level.
* European government bonds also faced selling pressure, reflecting mounting fiscal and debt sustainability concerns.
In Asia, Japan’s Nikkei fell 0.69% on worries about the country’s fiscal health, while the MSCI Asia-Pacific index slipped 0.4%. European equity futures pointed to a cautious open, with traders weighing risks from bond market volatility and ongoing political uncertainty in France and the UK.
Ben Bennett, Asia Head of Investment Strategy at Legal & General, noted:
“It’s a perfect storm for long-dated bonds. Fiscal deficits are huge, issuance is heavy, and Japan is no longer exporting capital to buy foreign bonds. This is becoming a major headache for governments.”
Gold Soars to Fresh Record
Against this backdrop of fiscal anxiety and political uncertainty, gold surged to a historic high. The benchmark bullion price jumped beyond $3,526 per troy ounce — surpassing April’s record and marking a 34% gain since the start of the year.
The rally has been supported by a weaker dollar, expectations of a US interest rate cut, and concerns over the Federal Reserve’s independence after President Trump’s political interventions. Trump has openly pressured Fed Chair Jay Powell and moved to dismiss Governor Lisa Cook, heightening fears that monetary policy could be compromised.
Investor demand has also been reinforced by large inflows into gold exchange-traded funds (ETFs) and central bank purchases. Analysts at Goldman Sachs now forecast gold to reach $4,000 per troy ounce by mid-2026.
Silver joined the rally, climbing to $40.8 a troy ounce — its highest in 14 years — as investors broadened their search for safe-haven assets.
Sterling Slumps as UK Debt Costs Climb
The British pound posted its sharpest one-day drop since April, falling as much as 1.5% against the US dollar before stabilizing. The slide came as the UK’s 30-year gilt yield touched 5.72%, reflecting deep concerns over the country’s public finances.
Market Outlook: Jobs Data and CPI in Focus
Investors now await a series of key US economic releases:
* Job openings and private payrolls data this week.
* The August US nonfarm payrolls report on Friday.
* CPI inflation data on September 11, which could be decisive for the Fed.
Markets are currently pricing in an 89% chance of a 25-basis-point Fed rate cut this month.
With global bond yields at multi-decade highs, gold at record prices, and currencies under pressure, markets are entering a highly volatile phase. Fiscal deficits, political risks, and central bank credibility are now the dominant forces shaping investor behavior.
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HFMarkets
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