The Hindu Business Line : Good response to MCX Gold Guinea

Mumbai, May 20 Considering the high open interest, the newly launched futures trading in MCX Gold Guinea (8 gm gold coin) seems to be attracting good response from investors.

The contract, launched on May 8, Akshaya Tritiya day, is recording a daily average volume of 66 kg with open interest rising steadily from 8 kg to 38 kg on Monday.

A buyer of the gold coin can take position by paying a margin of Rs 400 (4 per cent) per 8 gm gold coin and pay the remaining while taking delivery.

Optionally, if the prices appreciate steeply the buyer can book his profit without taking delivery. The delivery will be of .995 purity (24 carat). The guineas will be supplied by London Bullion Market Association-approved suppliers or others as may be approved by MCX and will be serially numbered.

Delivery centres are in Ahmedabad at G4 Securitas and at additional delivery centres at New Delhi, Mumbai, Hyderabad, Bangalore, Chennai and Kolkata. “The cost of buying gold coins in the futures market is cheaper as compared to banks,” said an analyst.

For instance, he explains, 8 gm of gold coin was traded at Rs 10,300 in MCX on Tuesday, while it was quoted at Rs 11,631 per 8 gm by Kotak Mahindra Bank and HDFC Bank.

It works out cheaper to take position in the futures market even if one adds an additional cost of Rs 200 per coin, he adds.

However, banks give instant delivery of the gold coin unlike in futures market where the buyer has to wait till the expiry of a contract to take delivery. Presently, there are July and August contracts available for trading and new contracts expiring at the end of the month will be launched by the exchange.

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