MCX follows suit for precious metals

Our Bureau

Mumbai, April 20

NCDEX on Thursday imposed special margins on wheat futures contracts, while the Multi Commodity Exchange (MCX) imposed special margins on gold and silver contracts, sources said.

The National Commodity & Derivatives Exchange (NCDEX) imposed 3 per cent special margin on all long positions of wheat contracts - April, May, September, October, November and December as futures prices of all the contracts were up by about 2 per cent over the previous day.

Wheat May contracts ended at Rs 869 a quintal on Thursday, while June contracts ended at Rs 910 per quintal.

As per the contracts, the exchange can levy special margin if prices rises over 2 per cent over previous close.

"Some bit of liquidation of long positions in all the contracts is possible at higher levels. One should look at booking profits on these counters," according to Kotak CSL - Research.

3% margin for silver

Meanwhile, MCX on Thursday also imposed a special margin of 2 per cent on gold June 2006 contracts and 3 per cent on silver May 2006 contracts mainly due to higher volatility in futures prices, a broker said.

On Wednesday, gold June 2006 contracts ended at Rs 9,486 per 10 gram, up from the previous close of Rs 9,197 per 10 gm, while silver May 2006 contracts ended at Rs 22,339 per kg, up from Rs 20,839 per kg.

(This article was published in the Business Line print edition dated April 21, 2006)
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