Titan Shifts Gold Hedging to MCX From GIFT City
Fri July 17 2026
From July 1, the OI for the October contract was 869, which jumped to 6367 by July 17. Similarly, the December contract has also seen a jump in interest, with an OI of 40 on July 7, surging to 4916 by July 17. Titan Industries Ltd., India's largest branded jewellery maker, has shifted a significant portion of its gold hedging activity from GIFT City to the Multi Commodity Exchange (MCX), according to people familiar with the matter, in a move that could boost liquidity on India's domestic commodities bourse.
The migration marks a shift from dollar-denominated contracts traded at GIFT City to rupee-denominated futures on MCX. People familiar with the decision said one of the key drivers was to reduce reliance on dollar-based hedging and better align the hedge with the company's domestic gold purchases.
Moneycontrol has reached out to Titan for comment. The story will be updated if the company responds. The move is already visible in MCX trading data. Open interest in the October gold futures contract rose from 869 lots on July 1 to 6,367 lots by July 17, while the December contract climbed from just 40 lots on July 7 to 4,916 lots over the same period. One MCX gold futures contract represents one kilogram of gold.
The increased participation has also narrowed spreads between bid and offer prices in deferred-month contracts such as October and December, according to market participants. Such contracts typically see limited trading activity because most participants prefer near-month contracts.
Why GIFT gained favour
When GIFT City introduced international gold contracts linked to global bullion prices, several large jewellers and refiners shifted their hedging activity there. The attraction was that imported gold is priced in dollars. Hedging in GIFT therefore closely tracked the international purchase price and reduced basis risk—the risk that gains on a hedge fail to fully offset movements in the underlying exposure because the derivative price and the physical purchase price move differently.
Before GIFT, many participants hedged imported gold on MCX. However, domestic gold prices also reflect import duties, local premiums and currency movements, meaning they do not always move in lockstep with international bullion prices.
Large jewellers also executed over-the-counter (OTC) hedges through International Banking Units (IBUs) operating in GIFT City, primarily Indian and foreign banks.
Why MCX now
Some market participants believe the economics have shifted.
For companies purchasing gold domestically rather than importing it directly, a rupee-denominated MCX contract more closely mirrors the price ultimately paid, reducing the mismatch between the hedge and the underlying exposure.
"Hedging overseas is more appropriate when the gold is being imported directly. If the purchase is from the domestic market, MCX provides a much better price match and hedge," said a person familiar with the matter, requesting anonymity because the discussions are private.
The move could also provide a meaningful boost to MCX's gold derivatives franchise. A participant of Titan's size entering deferred-month contracts can deepen liquidity, tighten trading spreads and improve price discovery, making those contracts more attractive for other jewellers, refiners and institutional hedgers.
Source: https://www.moneycontrol.com