New Delhi (PTI): The government's decision to ban four more commodities from futures market has spawned a demand for suspension of forward trading in gold, silver and sugar as the industry blames speculation for volatility in prices.

The All India Sarafa Association, an umbrella body for bullion traders, has written to the Prime Minister and Finance Minister seeking a ban in futures trading of gold and silver,

"Sudden rise and fall in the prices of gold and silver, many times in a day, has created instability in the minds of consumers and adversely affected the bullion trade," the traders' body President Sheel Chand Jain said here.

Echoing his view, Delhi Grain Merchant Association President Om Prakash Jain said that a few companies control the price movement in forward trading and they are responsible for the artificial rise or decline in commodity prices including that of sugar.

Commodity market analysts, however, are of the view that a ban in these commodities would not help control volatility as prices are determined by fundamentals and international factors like forex movement and crude oil prices.

"Speculation is not the only reason for the price movement of the sweetener. It can affect only up to five per cent of the movement, not beyond that. The price movement mainly depends on demand and supply situation in the country," Karvy Comtrade's G Harish said.

The government suspended futures trading in soya oil, potato, rubber, chana (gram) yesterday, while rice, wheat, urad and tur was banned early last year.