Multi Commodity Exchange of India Ltd has signed a memorandum of understanding with India Bullion and Jewellers’ Association to study the viability of jointly setting up a bullion spot exchange as and when the policy is announced by the Government.
It is in line with the Government of India’s vision of establishing trade efficient and consumer friendly system of regulated gold exchange for bullion stakeholders for efficient price discovery and transparency.
Gold spot exchange, once set up, would create a vibrant gold ecosystem corresponding to India’s annual demand of about 800-900 tonnes.
It would further lead to assurance in the quality of gold, provide for a robust settlement mechanism, multiple delivery centres, active retail participation, greater integration with financial markets and boost recycling, the exchange said in a statement on Thursday.
It would also give a fillip to the gold monetisation efforts of the Government through transparency and standardisation of the gold market.
By virtue of this MoU, the entities would also undertake a series of initiatives such as organising joint seminars and awareness programmes on price risk management for bullion traders and jewellers across the country.
The awareness programmes would educate small and medium jewellers from unorganised markets on hedging tools such as gold futures and options.