Multi Commodity Exchange Ltd. (MCX), India’s leading commodity exchange recorded the first delivery in the Gold Guinea July Contract. The Gold guinea July contract has seen great success since the launch of the contract with an average trading volume of Rs.7.63 crores per day and seen an increasing participation from retail participants resulting in a delivery of 3,118 coins of 8 grams each (app. 25 kgs valuing 3.18 crores). The delivery demonstrates the transparent pricing and assurance on purity of the coins by the exchange.
The settlement price on expiry of the contract was Rs.10,224/- per 8 grams including the making charges of Rs.200/- per 10 grams being charged from the buyer as against a pricing of Rs. 11,052 /- in physical gold coin markets on that day.
On this achievement Mr. Sumesh Parasrampuria, Chief Business Officer, MCX said, "Delivery of single guineas marks that even retailers are finding opportunities on the exchange to discover better price from a nationwide market offered on the MCX platform”.
Most of the deliveries took place at Group 4 Securitas delivery centre in Ahmedabad, though participation was seen pan India especially from South India. Retail participation in the contract is on the increasing trend which is discovered by data that more than 15 members took delivery on behalf of their multiple clients, each delivery ranging from 1 to 10 coins also. The guineas delivered were LBMA approved, numbered serially with 995 purity certificate.
The gold guinea contract is tailor-made largely for the physical commodity users/retail investors so that they can take maximum benefit out of it.
The sale of gold coins goes up by almost 20% during the festival season as people perceive gold guineas as auspicious. MCX offers a platform where traders, retailers will have to pay much lower premium than 10-15% they pay to banks. MCX commands more than 90% of market share on Bullion trading in India. Many leading corporate and institutions are hedging their price risk on MCX platform.