Page 14 - Bullion World Volume 3 Issue 2 February 2023

Bullion World | Volume 3 | Issue 2 | February 2023

Price Risk Management Via

MCX Bullion Derivatives Contract

Mr Shivanshu Mehta, Head - Bullion, MCX

Characterised by expiries every month and smaller denominations,
therefore, carrying lower premiums, Gold and Silver mini contracts would
enable small and medium-sized jewelers to hedge their bullion price risk.

MCX Gold and Silver Prices are prices along with the domestic
considered the benchmark for value- premium/discounts. Spot-Futures
chain and end-consumers alike. It is integration is thus seen via our
understood that most pricing is done compulsory delivery contracts.
MCX (+/-). MCX Bullion contracts
are designed considering the need MCX prices mirror both international
of all market participants namely price movement as well as domestic
Bullion traders, Corporates, Retail spot prices with high degree of
jewellers, importers, investors and co-relation as shown in the charts
end consumers. below:
Mr Shivanshu Mehta
Further, MCX Gold and Silver prices Correlation of Exchange futures
reflect on all four elements: USD/ price vis-à-vis international futures
INR exchange rate, Custom Duty price in CY- 2022: Gold: 99% and
tariff, international gold and silver Silver: 99%
The turnover of
bullion futures
contract during
CY-2022 was about
27 lakh crore. The
turnover of bullion
options contract
in the CY 2022 of
4.15 lakh crore had

seen significant
increase of around
200% as compared
to last year turnover
of 2 lakh crore.

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