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Our Bureau

Kolkata, Nov. 4 National Spot Exchange Ltd (NSEL) — the spot commodity exchange promoted by Financial Technologies India Ltd and National Agricultural Cooperative Marketing Federation of India (NAFED) — will launch spot gold and silver contracts with Kolkata as the delivery centre later this month.

To start with, gold contracts will be of one kg and 100 gm and silver of 30 kg. However, in future, contracts in smaller units will be launched to attract retail investors.

NSEL, which went live in October, has launched a similar contract deliverable at Ahmedabad and more such contracts were planned in Chennai, Delhi and Mumbai.

“Since Kolkata is a fairly large centre for gold trading we decided to launch the contract here by the month-end,” Mr Anjani Sinha, Managing Director and CEO, told newspersons here today.

Though spot-trading is delivery backed, investors in NSEL may also opt for de-materialised trading whereby the investors would be offered the warehouse receipt – tradable at the exchange — following a purchase.

According to Mr Sinha, the annual maintenance cost to be borne by an investor for demat trading of gold at NSEL was estimated at 0.2 per cent of the value.

Also, to ensure the participation of retail investors in gold, the exchange opens its certified gold testing centres.

Once certified, the gold will be vaulted at NSEL, ready for future trading.

According to NSEL, unlike the existing practice of buying or selling gold through bullion traders at a premium or a discount over the market price, the retail investors may sell the certified gold at the prevailing price in the exchange.

NSEL has identified copper, zinc and nickel for launching future contracts in the non-ferrous metals category.

The launches are expected in end 2008-09. In the agri-sector, the exchange has started with a cotton contract in Mumbai in October and has lined up contracts in urad, tur and guarseed.

“We are focusing on less perishable agri-commodities for trading on exchange platform,” he said.

Future agri-contracts will be launched for castor seed and jeera deliverable from Gujarat and soyabean to be delivered from Maharashtra.

More Stories on : Commodity Exchanges | Gold & Silver | West Bengal

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