As we see gold scale new highs amid heightened uncertainty posed by Trump’s tariff measures, the commodity derivatives exchange – MCX will from today facilitate trading in 10gm gold futures contract. Here below are listed all the salient features together with other pointers.
Pertinently gold futures in the previous day’s trade hit a new high of Rs 90,284 per 10 gm, while in the retail market it is available for 92,070 per 10 gm.
Key features of 10 gm gold futures contract
Trading unit: 10 gm denomination
Delivery centre: Dedicated clearing house at Ahmedabad and additional delivery centres at New Delhi/ Mumbai.
Quality specification: 999 purity. Further, it should be serially numbered gold 10 gm supplied by LBMA approved suppliers or other suppliers as may be approved by MCX, to be submitted along with supplier’s quality certificate.
Funds pay-in: Tender/expiry day + 2 basis: 12 pm
Delivery pay-out: Tender/ expiry day + 2 basis: 2 pm
Funds pay-out: Tender/ expiry day+ 2 basis: 2 pm
Packaging: 10 gm gold with tamper proof only
Making charges for delivery: Buyer shall have to pay Rs 300 (over and above the DDR) per 10 gm.
What led to the introduction of 10 gm gold futures contract?
According to Prithviraj Kothari, Managing Director of RiddiSiddhi Bullions Limited (RSBL), the introduction of the 10 gm gold futures contract – the first of its type being introduced by the MCX was driven by several factors aimed at enhancing market accessibility and improving risk management for investors including:
· Standardized Contract Size: The 10 gm contract caters to retail investors and small-scale traders who may find traditional 1 kg or 100 gm gold futures contracts too large or capital-intensive.
· Price Discovery & Hedging: With rising gold prices and market volatility, this contract offers a more precise and flexible hedging tool for both individual investors and jewellery businesses.
· Increased Participation: By lowering the entry barrier, MCX attracts a wider pool of participants, including small traders and retail investors.
· Bridging Physical Demand: The contract aligns closely with India’s strong retail demand for 10 gm gold units, which are popular in jewellery purchases.
Advantages of 10 gm gold futures contract
· Lower Capital Requirement: Smaller contract size requires less margin, making it affordable for individual investors.
· Improved liquidity: A broader investor base enhances market depth and trading volumes.
· Price Precision: The 10 gm contract aligns closely with retail pricing trends, offering better correlation for jewellery buyers and sellers.
· Flexibility for Jewelers: Jewelers can efficiently hedge inventory at precise weights, reducing exposure to volatile gold prices.
This contract effectively fills the gap between retail gold buyers and professional market participants, offering a tailored solution for India’s gold-dominated investment landscape.
