Where are gold and silver prices headed this week

Gold and silver prices could remain under pressure in September, with US employment data, central-bank expectations and geopolitical tensions likely to drive trading. The bullion market is set to enter the month on a cautious note the after witnessing a sharp sell-off last week.

On the Multi Commodity Exchange (MCX), gold futures for October delivery lost Rs 6,157, or 3.8 per cent, to end the week at Rs 1.56 lakh per 10 grams. Silver futures for September delivery fell Rs 9,893, or 4 per cent, to Rs 2.36 lakh per kilogram. "MCX Gold witnessed a sharp correction last week, falling from around Rs 1.63 lakh to Rs 1.56 lakh per 10 grams, resulting in a decline of nearly over Rs 6,000 from the weekly peak and a negative weekly closing of more than 3 per cent," Jateen Trivedi, VP research analyst - commodity and currency, LKP Securities told PTI. The decline was also visible in overseas markets. Comex gold futures for December delivery fell $150.7, or 3.2 per cent, over the week to settle at $4,680.6 per ounce. Silver futures declined $2.56, or 3.64 per cent, to $67.78 per ounce. According to Pranav Mer, senior vice president, EBG - commodity & currency research, JM Financial Services Ltd, selling intensified on Friday following Federal Reserve Chair Kevin Warsh's speech. The Fed chief's commentary on inflation and monetary policy led to profit booking across bullion markets, Mer said.

Geopolitical tensions add to market uncertainty

Geopolitical developments will remain another key focus. Traders will continue to monitor the US-Iran conflict, while developments around the Strait of Hormuz could influence oil prices and inflation expectations. Despite the steep weekly decline, silver maintained a stronger monthly performance than gold in August. Silver gained around 21 per cent during the month, compared with a 15.7 per cent rise in the yellow metal, Gaurav Garg, head of Research at Lemonn markets desk, said. Trivedi said, "The combination of dollar movement, labour-market data, Fed expectations and geopolitical headlines is likely to determine whether gold stabilises after the recent correction or enters another phase of profit booking."

US jobs data, Fed policy bets in focus

The spotlight now shifts to US labour-market indicators, with traders watching non-farm payrolls, unemployment data and ADP non-farm employment change. The readings could influence expectations around Federal Reserve policy ahead of its September meeting, Mer said. "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," Trivedi said. Markets will also assess manufacturing and services PMI data from major economies, including India. Inflation figures from the Eurozone and Germany, along with US non-farm payroll data due towards the end of the week, will be closely tracked.