New Delhi, Oct. 1: The government will reintroduce futures trading in gold and silver, after nearly half a century, which traders say will help curb volatility in gold prices.
“Trading in these two commodities will commence on October 3 and the Forward Markets Commission has already given the necessary clearance,” the government said in a statement.
Futures trading, banned in the country till as recently as 1998, is regulated by the Forward Markets Commission (FMC) under the Forward Contracts (Regulation) Act, 1952, much in the same way as the Securities and Exchange Board of India (Sebi) regulates the capital market.
FMC is part of the ministry of consumer affairs and public distribution. Futures are exchange-traded contracts, having certain standard specifications, to enable a buyer or seller to buy or sell a specific quantity of commodity in a designated future month at a price agreed earlier between the two parties.
“...With the introduction of futures contracts in gold and silver the need of the market and people would be answered,” the official statement added.
India is the world’s largest gold consumer with an average daily import of 1.6 tonnes or about 70 per cent of net consumption. Analysts said retail demand would pick up this month which is expected to peak before the Diwali.
Prices remain firm
Gold prices rose on the Delhi bullion market today on sustained buying by local parties amid reports of a firm trend in international markets and closed with moderate gains.
Gold in Asian markets quoted higher around $385.30 an ounce against the previous level of $383.38.