NCDEX brings more transparency into Gold Pricing in India.
NCDEX brings more transparency into Gold Pricing in India
Launches Gold Futures Contract
- Physically delivered bars
- First time polling of gold price premium by independent agency
- Formula-drive Final Settlement Price based on polled premium
NCDEX, the leading commodity exchange, today announced the launch of Gold futures contract that will provide a transparent and credible price benchmark to the Indian consumer.
For the first time, consumers, jewellers, traders, banks, and gold refiners will get a scientific and rigorous assessment of the daily premium for gold prevailing in the physical market to derive the final wholesale price.
To make it possible, NCDEX has introduced an independent gold premium polling mechanism that will give the Indian market an unbiased price benchmark for the first time.
The Gold premium benchmark will be used for arriving at the settlement price of the Gold futures contract. This contract will be available for trade from May 21, 2015.
“NCDEX is a strong supporter of information transparency in the commodities markets and has pioneered highly innovative methods of price discovery . With newly launched Gold futures contract, we hope to bring much-needed clarity into the way gold is priced in India,” said Samir Shah, MD & CEO.
NCDEX-polled Gold premium will connect the prevailing international price for gold with the wholesale value of gold kilobars in India, the world's largest consumption market.
This premium – sometimes a discount - will reflect the logistical cost and market fundamentals affecting gold in India. The daily value of the premium or discount, in US dollars per troy ounce, will be based on an independent unbiased survey of banks, traders and dealers in various Indian cities for a kilobar of fine gold quality 995, available in Ahmedabad.
The new contract will improve price discovery and further extend the NCDEX bullion suite, that includes GoldHedge and SilverHedge, to meet the growing industry demand to effectively manage their price risk. It is a deliverable gold contract with the final settlement price calculated by taking into account the international price of gold, currency exchange rate, polled Gold premium and taxes.