Yields at multi-year highs are creating headwinds in the gold markets. Michael Blumenroth explains why gold is holding up relatively well despite a strong U.S. dollar and rising interest rate expectations.October 1, 2026. FRANKFURT (Xetra-Gold). Welcome to October and on to the grand finale of 2026. In Munich, the festivities at the Wiesn will continue through Sunday, after which this year’s Oktoberfest will be history once again. The author of this piece does not know whether fairground attractions like “Hau den Lukas”—where participants strike a spring-loaded button with a sledgehammer, the head of which is usually made of hard plastic—still exist today. On the financial markets, the bond markets have taken on the role of the sledgehammer in recent days.Bond Markets: Yields at Multi-Year HighsAs I mentioned in my previous market commentary, yields have once again hit new highs this week. For example, yields on 10-year U.S. Treasury bonds rose above the 5.30 percent mark wednesday for the first time since 2002. Similarly, the 5.65 percent yield on 30-year bonds was last seen on the board in 2002. Yields on bonds from eurozone countries were also unable to escape this upward trend: they, too, rose sharply. Just as I was writing these lines, the yield on 30-year British government bonds also rose above the 6 percent mark for the first time since 1998.Rising Yields: Headwinds for GoldLet’s keep it short: In most cases, sharply rising yields also mean significant headwinds for gold prices. After all, gold pays neither interest nor dividends. Government bonds, like gold, are considered “safe havens,” but they also offer investors a fixed rate of return. The rise in yields on U.S. Treasury bonds also increases the appeal of investments denominated in U.S. dollars. As a result, the U.S. dollar appreciated, while the euro fell to its lowest level against the U.S. dollar since the beginning of the year.Gold Price: Pullback, Rebound, New PressureIt should therefore come as no surprise that gold prices have recently come under pressure. Last Thursday morning, they were still trading at around $4,285 per ounce. On Friday, they initially rose to $4,315 and ended the week at about $4,290. However, as the week began and yields rose rapidly, prices fell sharply: On Monday, they dropped to $4,111. Despite yields continuing to rise, prices recovered to $4,220 by wednesday afternoon after U.S. inflation data came in lower than the market consensus had expected. The renewed sharp rise in yields last morning and the continued appreciation of the U.S. dollar subsequently caused the gold price to fall back to its current level of $4,160.Weak Euro Boosts Xetra-GoldThe Xetra-Gold® price was at least somewhat supported by the weaker euro against the U.S. dollar. During regular trading hours, it initially rose from €121.00 per gram last Thursday morning to about €121.70 per gram on Friday. On Monday, it slipped to a weekly low of €116.45, recovered wednesday to €119.25, and was trading at €118.40 at the time of this writing.Outlook: Focus on Bond Markets and the U.S. Labor MarketBond markets are likely to remain in the spotlight. As long as yields do not fall sustainably, gold prices are likely to struggle. However, the U.S. jobs report expected tomorrow could provide new momentum in one direction or the other. While inflation data is currently the main focus, many traders and analysts continue to closely monitor the state of the U.S. labor market. It, too, is likely to play an important role in the Fed’s future monetary policy.I wish all readers a relaxing holiday weekend. By Michael Blumenroth, October 1, 2026 © Deutsche Börse AG About the Author Michael Blumenroth is an investment strategist in Deutsche Bank's Chief Investment Office, specializing in commodities and currencies. He has many years of experience trading products in these areas, particularly precious metals.