Inflation Figures From Eurozone and Germany, and US Non-farm Payroll Data Due Towards the End of the Week Will Also Be Closely Tracked.

Commodity markets are heading into September with traders bracing for another bout of volatility after a bruising week that wiped out more than Rs 6,000 from gold prices, with US jobs data and geopolitical tensions taking centrestage, analysts said. Gold futures for October delivery on the Multi Commodity Exchange (MCX) tumbled Rs 6,157, or 3.8 per cent, last week to 156,000 rupees per 10 grams, while silver futures for September contract plunged Rs 9,893, or 4 per cent, to 236,000 rupees per kilogram. MCX Gold witnessed a sharp correction last week, falling from around 163,000 rupees to 156,000 rupees 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, said Jateen Trivedi, VP Research Analyst - Commodity and Currency, LKP Securities.

Investors will focus on manufacturing and services PMI data from major economies, including India. Inflation figures from Eurozone and Germany, and US non-farm payroll data due towards the end of the week will also be closely tracked. 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 added.

Pranav Mer, Senior Vice President, EBG - Commodity & Currency Research, JM Financial Services Ltd, said selling pressure intensified on Friday following Federal Reserve Chair Kevin Warsh's speech, with his commentary on inflation and monetary policy triggering profit booking across bullion markets. In international markets, Comex gold futures for December delivery declined USD 150.7, or 3.2 per cent, to settle the week at USD 4,680.6 per ounce. Silver futures fell USD 2.56, or 3.64 per cent, to USD 67.78 per ounce.

Going into the new month, markets will closely track US labour-market indicators, including non-farm payrolls, unemployment data, and ADP non-farm employment change, which could influence the Federal Reserve's decision-making ahead of its September meeting, Mer said. Geopolitical developments could add another layer of uncertainty, with traders monitoring the US-Iran conflict, while developments around the Strait of Hormuz remain important for oil prices and inflation expectations. Despite the correction, silver outperformed gold in August, gaining around 21 per cent against the yellow metal's 15.7 per cent, said Gaurav Garg, Head of Research at Lemonn Markets Desk.

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. Key inflation metrics and US non-farm payroll data will play vital roles in shaping investment strategies.