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Our Bureau

Mumbai, Nov 5 Financial crisis seems to have no impact when it comes to investor interest in gold. Multi Commodity Exchange of India Ltd (MCX) has witnessed a record delivery of 10,908 coins in its futures contract expired in October, surpassing the previous high of 8,900 coins for the August contract.

The settlement price on expiry of the contract was Rs 9,622 for 8 gm (including the making charges of Rs 200 for 10 gm). Open interest on the expiry date was 11,839 coins, of which 10,908 coins (about 92 per cent) went into delivery, while the others were cash settled with a penalty imposed on the seller for failing on contractual obligation.

Gold prices in the Mumbai bullion market was down 11 per cent in October at Rs 11,785/ 10 gm from Rs 13,200/ 10 gm on September 30.

“The sale of gold guinea has gone up due to the festive season. Our gold guinea contract is designed largely for the physical commodity users/retail investors to take maximum benefit from investment in gold,” said a MCX spokesperson.

The retail participation in the gold guinea contract is on the rise as evident from data showing that MCX members across the country took delivery on behalf of their clients, with delivery ranging from as low as one coin to multiple coins.

The high conversion rate of open interest of over 90 per cent for the delivery of coins on the expiry date in the Gold Guinea October contract corroborates this point.

The transparency of pricing of the gold guinea contract is clear from the fact that the average daily volatility and intraday volatility in October was lower compared to other similar investment avenues of gold through exchange traded funds.

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