Gundlach: What’s Inflation Got to Do With Recent Volatility? Nothing

The S&P 500 has increased dramatically compared with the MSCI Emerging Markets Index. "There has been enormous outperformance of the S&P 500 and that has accelerated since the middle of May, so emerging-market equities are extraordinarily weak," Gundlach said. He suggested this was the cause of investors' nervousness. "They are not only losing money in things like Treasury bonds and the S&P 500, but they're getting crushed in other markets."

However, Gundlach added that this was likely a short-term correction and that emerging markets would likely improve in the coming weeks. "If I was going to make a contrarian play," he said, "I wouldn't use gold, I'd use emerging-market equities compared to the S&P 500."

Gundlach was skeptical about growth opportunities in China, noting that performance on the Shanghai index is not in line with China's claims of growth above 7%. Furthermore, he said, the interbank borrowing rate spiked in June to nearly 14% from a range of 2% to 4% last year. "It's indicative of a world in China where banks don't feel comfortable lending to each other, which is indicative of financial trouble," he said. The rate is back down, he acknowledged, but is still uncomfortably high at nearly 6%.

Gundlach said he expects July will be a better month for investors than June was. "I think we'll have increased stability in the markets during July, thanks to reversals we've seen in the last few days. Things don't just continue on in that frenzied state."