Several things affect the value of bonds.

The big one is interest rates. If interest rates go up, the price of existing bonds that pay a fixed rate of interest usually goes down. That’s because investors would rather have a newer bond that pays a higher interest. To buy an older bond, they will pay a lower price.

Conversely, if interest rates go down, the price of existing bonds generally goes up. If you hold your bond until it matures, you avoid this interest rate risk. You will get the face value of the bond no matter what has happened to interest rates, assuming the issuer does not default.

Bond prices can also go up or down if investors perceive that the issuer - whether it’s a company or government - has become less or more likely to make full interest and principal payments.

Finally, bond prices can rise or fall if investors become more or less enthusiastic about bonds compared to other assets such as stocks, real estate or commodities.

For a primer on bonds see http://www.investinginbonds.com/