Volatility Looms for Gold and Silver in September

Gold and silver prices have taken a sharp correction in recent days, wiping out over Rs 6,000 from gold prices. As a result, bullion markets are bracing for fresh volatility in September, with traders anticipating a week of high market activity.

The Federal Reserve's upcoming policy decision is expected to be a key driver of market movements, with investors tracking US jobs data, manufacturing and services PMI data from major economies, inflation figures from the Eurozone and Germany, and US non-farm payroll data due later in the week. According to Jateen Trivedi, VP Research Analyst - Commodity and Currency at LKP Securities, 'The coming week is likely to remain highly volatile, with market participants attempting to price in the probability of a September Federal Reserve policy change.'

The sharp correction in gold prices has seen MCX gold futures for October delivery fall by Rs 6,157, or 3.8 per cent, last week to Rs 1.56 lakh per 10 grams, while silver futures for September declined by Rs 9,893, or 4 per cent, to Rs 2.36 lakh per kg.

Pranav Mer, Senior Vice President, EBG - Commodity & Currency Research at JM Financial Services, noted that selling pressure intensified on Friday following Federal Reserve Chair Kevin Warsh's speech, with his comments on inflation and monetary policy triggering profit booking.