New Delhi, Oct. 1 -- Gold prices suffered a sharp correction in September, with the precious metal losing around 6.5% during the month, marking its worst monthly performance since June. The decline came following monetary tightening by the US Fed as bond yields hit multi-year highs during the month.

However, with the festive and wedding season approaching in India, investors are now assessing whether seasonal demand, central-bank buying and geopolitical uncertainty can help gold recover in October.

One of the key pressures came from the US bond market. Global bond yields rose during September as concerns over mounting government debt and fiscal deficits pushed up term premiums. Higher yields increase the opportunity cost of holding non-...